Amazon is looking to enter into another market with an unmatched competitive advantage that will once again lead to retail stores hurting. It's not books or technology products this time though, now Amazon is coming for prescription medications.
What is the Service?
Amazon is launching RxPass in the United States. The new service will allow Prime members to have access to generic medications for just $5 a month. The fee will be added to the existing monthly subscription for those who enroll and covers the cost of delivery for the prescriptions which treat more than 80 common health conditions. The fee will not increase based on how many prescriptions members have and medications will be delivered on a monthly or quarterly basis.
More than 150 million Americans already take one or more of the medications that will be made available through RxPass so the service will immediately have a massive customer base as many of those are likely among Prime's 149 million subscribers in the United States.
RxPass comes after recent moves from Amazon to expand its healthcare services with the launch of its Amazon Clinic telehealth service and Amazon pharmacy which launched in 2020. Amazon has not commented about expanding its available prescriptions or launching in foreign markets but one can assume the company has lofty expectations for RxPass should it perform well in the U.S. market.
What Does This Mean for Consumers?
Well, getting prescriptions just got a sure lot easier for 150 million Americans. Depending on the medication it's not exactly the most time-consuming thing to drive to a pharmacy which may have to be preceded by a monthly phone call. However, no one is going to complain if they don’t have to deal with driving to CVS or Costco to get their prescriptions when they can just have them shipped to their door.
Depending on the drive, it may actually be a cost saving move to pay the $5 monthly fee. Especially if one follows the old adage of time is money.
What Does it Mean for the Market?
It’s hard to imagine consumers not getting in on this service immediately. One more thing that Amazon can take care of and deliver right to your doorstep. Amazon has got to be a winner from this news but the biggest losers are the pharmacies such as CVS Health (CVS) and Walgreens Boots Alliance (WBA). Additionally, local or nationwide grocery stores which offer pharmacies will certainly see lower demand such as Costco (COST), Walmart (WMT), Target (TGT), and Kroger (KR).
Amazon can’t currently deliver to all 50 states and can only offer generic medications so it’s not as if those services are going anywhere anytime soon. Retail pharmacies are not a thing of the past, but this is just the first step for Amazon and it will be interesting to see how it is able to expand the service from here. The convenience and cost factor is great for generic medications but it’s going to be difficult for Amazon to just be able to start delivering higher class drugs that require approval to receive.
At the end of the day it’s one more thing Amazon can take care of for you. There’s no possible way a mega corporation taking care of all your and others needs will ever backfire right?
