Amazon Debuts Online Drug Store, Sends Pharmacy Stocks Tumbling

Amazon’s new online pharmacy feature made its debut on Tuesday, immediately disrupting the pharmaceutical landscape

Amazon’s new online pharmacy feature made its debut on Tuesday, immediately disrupting the pharmaceutical landscape and sending the stock of other pharmacies tumbling.

Amazon Pharmacy allows customers in the U.S. to order medication or prescription refills — including creams, pills and even medications that need to stay refrigerated, like insulin — and have them delivered to their home in just a couple of days. However, the online pharmacy will not deliver Schedule II controlled medications, including most opioids.

Consumers, who must be over the age of 18, need just a profile on Amazon’s website where doctors can send prescriptions. Amazon Prime customers will receive free two-day delivery, while customers without Prime can get free delivery within five days or pay $5.99 to upgrade to two-day delivery.

Amazon Pharmacy rolls out service this week to 45 states, not not including Hawaii, Illinois, Kentucky, Louisiana and Minnesota, though the company expects to serve those states eventually.

Shares of Walgreens and Rite Aid had fallen ten percent before the opening bell Tuesday, while CVS Health Corp. fell 7 percent.

Amazon had hosted internal discussions about building out a pharmaceutical offering since 2017 and later acquired PillPack in 2018. Amazon Pharmacy relies in part on PillPack’s infrastructure, including its pharmacy software, fulfillment centers, and relationships with health plans.

“We wanted to make it easy for people to get their medication, understand the cost and get it delivered to the home,” said TJ Parker, Amazon’s vice president of pharmacy, who previously co-founded PillPack. “The hard work is to make it easy… there were a number of complications behind the scenes.”

“We think this new benefit will add tremendous value to our members,” Jamil Ghani, vice president of Amazon Prime, said. “It’s relevant as folks try to do more from the comfort and safety of their homes.”

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