CNBC reports that Amazon is seriously looking at an entry into the $300 billion pharmacy business, believing it is a good time to make a health care play with consumer appeal: ""For Amazon, it's a lucrative market that would require navigating a variety of existing players. For consumers with a high dollar deductible, Amazon could someday be a go-to destination to shop for drugs."
The story says that "for the last few years, Amazon has held at least one annual meeting at its Seattle headquarters to discuss whether it should enter the pharmacy business, says two people familiar with the company's plans. But this year, with the rise of high-deductible plans and the trend toward consumers paying for health care, it is ready to get more serious.
"Two people said that it's not a done deal that Amazon will move into this space, given the complex web of established players. But it is bringing on a new general manager to lead the team and formulate a strategy, and is deep in discussions with industry experts. That hire would sit under the consumables business, the source said. Another person said Amazon has started to recruit more broadly from the pharmacy space."
Amazon, which often tests initiatives in markets other than the US before bringing them home, has tested a prescription business in Japan, CNBC writes.
The story says that "for the last few years, Amazon has held at least one annual meeting at its Seattle headquarters to discuss whether it should enter the pharmacy business, says two people familiar with the company's plans. But this year, with the rise of high-deductible plans and the trend toward consumers paying for health care, it is ready to get more serious.
"Two people said that it's not a done deal that Amazon will move into this space, given the complex web of established players. But it is bringing on a new general manager to lead the team and formulate a strategy, and is deep in discussions with industry experts. That hire would sit under the consumables business, the source said. Another person said Amazon has started to recruit more broadly from the pharmacy space."
Amazon, which often tests initiatives in markets other than the US before bringing them home, has tested a prescription business in Japan, CNBC writes.
- KC's View:
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There are, to be fair, differing opinions about how disruptive Amazon would be to the traditional pharmaceutical business. I don't know enough about the intricacies of the space - especially the pharmacy benefits management side of the business that some see as the place where Amazon could really have an impact - to make a definitive judgement, but history suggests that traditional drug store companies ought to be a little nervous.
Pretending that their business is internet-proof would be the worst mistake. If I were CVS and Walgreens, I'd be looking for places where I could take it to Amazon, instead of figuring out how to play effective defense.
