- Online 8,000-lb. gorilla Amazon (AMZN +0.1%) can make life miserable for prescription drug sellers in a variety of ways according to Bloomberg.
- At the top of list is leveraging its massive logistics operation to launch a mail-based drug delivery business. Prime membership, where customers pay an annual fee of $99 for unlimited qualified shipments, would be yet another way for Amazon to build customer loyalty among retail prescription drug buyers. Prime Now, with its two-hour delivery, already includes convenience items found in drug stores. It would also be in position to improve the consumer experience using Alexa to shop for medicines online or on mobile devices.
- Use its buying power to offer customers inexpensive generics, like Walmart (NYSE:WMT), but with the added convenience of online ordering. It could make deals with insurers who do not have a large presence in mail drug delivery such as Humana (HUM +0.3%), Cigna (CI -0.3%) and even UnitedHealth Group (UNH -0.1%).
- Leverage the physical presence of Whole Foods to set up pharmacies or pick-up points in addition to mail delivery. It could also partner with local independent pharmacies by allowing patients to order medicines online for pick-up at the stores.
- Buy a drug distributor or pharmacy benefit manager like Express Scripts (ESRX -0.6%) which already operates a large mail-order business. A downside, though, would be the potential exclusion from competitors.
- Launch a startup. Amazon already owns wholesale distribution licenses in at least 13 states and could build a pharmacy operation from scratch which would enable it to restructure the drug supply chain.
- Related tickers: (ABC +0.1%)(WBA +3.1%)(CVS +3.3%)(CAH -0.3%)(MCK +1%)(AET -0.4%)
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