ERP News

Why Some Think It’s ‘Prime Time’ for Amazon to Enter the Pharmacy Market

855 0

The move is a natural for the e-commerce giant, and could wind up dramatically reducing the price of prescription drugs, according to Morgan Stanley.

For months, rumors have swirled that Inc. (AMZN – Get Report) has its sights set on disrupting the pharmacy industry next.

The e-commerce giant has reportedly set a November deadline to decide whether it will move into the drug supply chain market. Should Amazon decide to make a move, the company could help dramatically drive down the cost of drug prices, according to a Wednesday report from Morgan Stanley Inc. (MS – Get Report) analysts.

“Pharmacy could be the starting point for something much bigger,” the analysts wrote in a note to clients. “Can Amazon help lower drug spend is the underlying question in our mind.”

It would be relatively easy for Amazon to establish pharmacies because there are low regulatory barriers and fragmentation in the market, Morgan Stanley noted. Amazon can work with pharmacy benefit managers (PBMs) to be added to their networks and, from there, could set up retail pharmacies, as well as online ones, to build out a business. Employers are “already inquiring” about Amazon’s role in pharmacies, the firm said, and because of that, it would be harder for PBMs to exclude an Amazon pharmacy, were it to launch one.

In terms of what Amazon’s pharmacy network would look like, Morgan Stanley said the company could build virtual pharmacies that leverage its Prime Now network, while using its roughly 460 new Whole Foods locations to add retail pharmacies. This lighter brick-and-mortar footprint could ultimately drive drug pricing down, the firm added.

Read More Here

Leave A Reply

Your email address will not be published.