Amazon’s rise in the prescription-drug industry

BY: CLAIRE KIM

Amazon has always seemed like a formidable opponent in the retail industry and they have just become even stronger. Selling a wide range of products from clothing to food to books and to CDs, in-store businesses such as supermarkets, shopping malls, and even book/gaming stores have erupted in distress. In a sense, Amazon has monopolized pretty much every industry in America’s retail system making most in-store based companies rage in fury. However, no matter how angry businesses are with Amazon they can’t really blame them because it’s just their own marketing strategy that happens to appeal to many consumers who prefer online shopping. In general, online shopping is a much more efficient and convenient way to shop without having to deal with the hassle and time it takes to physically commute to a store and look through all the options. It’s natural to see many people visit Amazon’s URL than maybe a store far from their area because it’s just easier. With Amazon sticking to their e-commerce brand, they have recently decided to expand their business to the prescription-drug industry that is currently a $560 billion industry in the nation. By doing so, they are threatening the healthcare industry that has long been operated by companies such as Walgreens, CVS, and Rite Aid by pushing them away. Already, drops in revenue have been shown from all three of these major businesses ranging from as high as a 10% drop to as low as a 7% drop. By partnering up with PillPack (an online pharmacy that has been present in the market since 2013), Amazon has created a frenzy that will mark the start of a new system in distributing prescripted drugs. Although PillPack has been around for quite some time, they weren’t able to create a booming business because it was hard to convince people to follow this digital method when more than 90% of all prescriptions were settled through a physical encounter. With Amazon’s brand and business tactics, this partnership will take PillPack’s idea to the next level and actively transition consumers to start switching just as they did with the past few industries Amazon has transformed. As New York Times quotes, “The deal for PillPack could be just one piece in Amazon’s broader health ambitions.”

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