Amazon.com Inc. is considering entering the US$412 billion pharmacy business, a move that will shake up the industry, but success in the endeavor could prove elusive, the Wall Street Journal reports.
The US market for selling prescription drugs appears ripe for an e-commerce makeover, the newspaper said, noting that both patients and drug manufacturers bewail a situation wherein a few big players control the drug supply chain.
Pharmacies in the United States dispense about 4.5 billion prescriptions every year, and patients pick up nine out of 10 prescriptions at a retail pharmacy, making the business a target for the ever-expanding e-retailer.
But the business is quite different from selling books and toys, the Journal said, citing industry experts.
It noted that medicines are highly regulated and can be sold only by a pharmacy with a state-issued license. Besides, the patient usually doesn’t pay directly for their prescription drugs.
“Amazon has built its business dealing with first-party payment – the consumer,” Adam Fein, president of Pembroke Consulting, told the newspaper. “It’s a very different business when the consumer is sharing the cost with a third party.”
Amazon chief executive Jeff Bezos, while recognizing the different nature of the pharmacy business, believes that “there are a lot of similarities” between selling books and providing medicines.
“Customers want selection, convenience, price and information,” the WSJ quoted Bezos as saying.
Drugstore.com eventually was bought by bricks-and-mortar retailer Walgreen’s, which said last year it was shutting down the site to focus on its own digital efforts.
In 1999 Amazon acquired a 40 percent stake in Drugstore.com Inc. But the internet retailer in health and beauty care products was eventually bought by pharmacy store chain Walgreens.
– Contact us at [email protected]