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Amazon Shelves Plan To Sell Prescription Drugs (cnbc.com)
Major Blud writes: CNBC is reporting that Amazon Business, which considered selling pharmaceutical products last year, has put its plans to do so on hiatus. "The change in plan comes partly because Amazon has not been able to convince big hospitals to change their traditional purchasing process, which typically involves a number of middlemen and loyal relationships," reports CNBC. Amazon was able to gain licensing in 47 out of the 50 U.S. states, but has struggled to land contracts with large hospital networks. "The setback illustrates the challenges of getting into the medical supply and pharmaceutical space, even for a company as big as Amazon," reports CNBC. "Several health-care and pharmaceutical distribution companies saw their stock take a nosedive following recent reports of Amazon potentially getting into the space, but it will likely take some time before those concerns turn into real threats."
Hospital is a middle man - they get markup on what they sell. They have no incentive to lower that cost. Your health insurance and you in the end pay for it!
I'm not sure if I believe this.
As a physician employed by a fairly large hospital network, I know that my hospital pinches any penny they can.
If they can get 1 cent less per acetaminophen tablet, they would sell their own mother for the opportunity.
Not that they will pass that savings on to the consumer. But it will increase their margins so that they can afford to buy more stuff.
So I can't believe Amazon.com is giving up on this.
The only thing I can think is that the hospitals have multi-year contracts that need to run out and Amazon wasn't willing to wait.
Help! I'm a slashdot refugee.
If the putative swamp-draiing team in Washington had put John Stossel in charge of the FDA and turned Amazon loose with the ability to buy medications in bulk on the world market and fill US prescriptions for less, Trump's second term would be assured. But apparently, nothing this rompingly popular is even under consideration by the 'populists'.
If anything, the pond scum is getting deeper.
Amazon is pretty good at consumer delivery, but they're B2B service for repeated mass deliveries doesn't really exist yet. Nor is it in their area of competency. Those supply chains are already pretty well optimized, the ordering will be done via boring forms (for legal reasons), and there's no upselling/tracking of people's desires, and things are moved by the box, not the item. Also, big hospital chains already get bulk discounts.
My guess is they really just weren't able to compete on price and service, not that "there are longstanding relationships that made hospitals decide to lose money.:
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