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Amazon Is Headed For the Prescription-Drug Market, Analysts Say (bloomberg.com)
An anonymous reader quotes a report from Bloomberg: Amazon.com Inc. is almost certain to enter the business of selling prescription drugs by 2019, said two analysts at Leerink Partners, posing a direct threat to the U.S.'s biggest brick-and-mortar drugstore chains. "It's a matter of when, not if," Leerink Partners analyst David Larsen said in a report to clients late Thursday. "We expect an announcement within the next 1-2 years." Amazon has a long standing interest in prescription drugs, an industry with multiple middlemen, long supply chains and opaque pricing. In the 1990s, it invested in startup Drugstore.com and Amazon Chief Executive Officer Jeff Bezos sat on the board. Walgreens eventually purchased the site and shuttered it last year to focus on its own branded website Walgreens.com. Leerink's calls with industry experts suggest that Amazon "is in active discussions" with mid-size pharmacy benefit managers and possibly larger player such as Prime Therapeutics, Larsen's colleague, Ana Gupte, wrote in a separate report Friday. On Friday, CNBC reported that Amazon could make a decision about selling prescription drugs online before Thanksgiving.
"it's just another seller. Big whoop."
Maybe. You might be right. It'd be like Amazon and the shoe industry, where Amazon doesn't really do much and they are middling.
otoh, there are 2 major tracks they could disrupt--Amaon is also one of the most valuable companies out there that once they get a taste, could go on a buying spree of patents and companies and facilities worldwide. We already saw what Shkreli did, and his funding, knowledge, and points of focus would pale in comparison to a half-assed assault Amazon could easily try.
Keep in mind, some of the drug costs are so high these days compared to 20 years ago for the same medication, Amazon could buy up companies in separate divisions, cut out the rx managing contracts, and make a killing with the customer base they have and would acquire from drugs alone. Remember, this is an over $300billion a year market they don't currently even touch. Some base brand name drugs with the same formulation have gone up $90 for a 90 day supply; they acquire one of the 3 major companies in there, slash the price to a half, that would get people to shift, hard.
The second area is making a straight up level playing field--Sometimes a big stick in the background with a centralized marketplace is all you need for upfront and fair pricing to come to bear on tablet form rx's. One of the major areas that the health industry screw people over is the unclear pricing, whether by hospital, by insurance plan, by geographic area--Amazon could start to obliterate that.
One of the big problems in health care is that most consumers have no idea how much anything costs because insurance masks prices. Having Amazon butt in could help repair the broken market feedback mechanisms that keep costs in check, doing far more good for consumers than any feedback-breaking government "help" ever could.