How Amazon Could Disrupt Health Care

I could totally see a time in which
you could be sitting at home with your Amazon Alexa speaker device and you
could say, “Alexa, refill my prescription.” And three hours later,
someone arrives to your door, there’s your medication, you don’t even
have to leave the home. It may sound too good to be true,
but some analysts think that within the next few years, it
could be a reality. Just recently, the company announced that
its voice assistant, Alexa, now has HIPAA-compliant skills, meaning it
can work with health developers that manage protected health information to
help people do things like store prescription information, track blood
sugar or book doctor’s appointments on their device. Alexa, ask Livongo my
last BG reading. Your last blood sugar reading, taken 55
minutes ago, was 78 milligrams per deciliter. It’s another example of Amazon’s push
into healthcare, coming on the heels of the retail giant’s acquisition of
PillPack, an online pharmacy that makes home deliveries to customers
who take multiple medications daily. The acquisition spurred lots of speculation
that Amazon is aiming to disrupt the $934.8 billion dollar global pharmaceutical industry,
with the goal of allowing consumers to order and refill their
prescriptions just as easily as they would buy electronics or clothing
off of Amazon Prime. I get my cat food, I get my
Band-Aids there, but the one thing that consumers cannot buy on
Amazon is prescription medicines. We’ve been waiting with bated breath
since PillPack was acquired by Amazon in the summer of 2018 for the
company to make a formal announcement about its pharmacy ambitions. While PillPack is geared towards older
customers and caregivers who need help keeping track of various
prescriptions, analysts see Amazon’s acquisition as an indicator that the
e-commerce giant plans to expand on this digital pharmacy model, eventually
catering to all pharmacy-goers. I don’t think it would be very
difficult to kind of take the success they’ve had with PillPack and extend
it into acute medications for instance, or for patients that may be
on one or two medications a month. Customers would certainly be excited to
bid farewell to the long pharmacy lines. Eighty five percent of Amazon Prime
members indicated they’d be interested in using an Amazon pharmacy service. The opportunity in prescription drugs for
Amazon is huge, but they’ve stayed away from the space
for a few reasons. It’s heavily regulated. There’s some entrenched competition. Lots of companies have tried to
get into this space and failed. Healthcare in the U.S. is complex. Prescription drugs are usually administered
by pharmacy benefit managers or PBMs, middlemen like CVS Caremark
and Express Scripts, that work with the government and employers
to manage consumer’s medications. However, these PBMs aren’t always incentivized
to give consumers the best deal, and so they keep information
about comparative prices and drug effectiveness secret. These types of competitive barriers
and logistical complexities have historically dissuaded players like Amazon
from entering the market. The real problem isn’t the ability
to apply an e-commerce model to pharmacy, but the ability to find ways
to do this coordination in an efficient way. And you have doctors over here
completely siloed away from everyone and insurance companies over here, PBMs over
here, siloed away from everyone as well. And the pharmacy is forced to try
and coordinate between the three without the capabilities to do so. Gamache-Asselin says the silos are at least
partly the fault of the archaic software that doctors, PBMs
and pharmacies rely upon. Alto and other online pharmacies like PillPack
are doing what they can to simplify these systems on
the pharmacy side. But in the meantime, analysts say Amazon
could get its foot in the door with an initial focus on consumers
who are paying for their prescriptions out of pocket. There’s the trend that people refer
to in the industry as the consumerization of health, which basically
means that consumers used to rely on their insurance, so they didn’t
think so much of, how much does healthcare cost? When can I get a
better deal and where? But now they do, because increasingly
with the rise of high deductible plans and the number of people
who are forgoing insurance altogether, there is a huge chunk out there
that is financially incentivized to start thinking about their healthcare
and take charge. The good thing for Amazon is that
the quote unquote cash marketplace is actually a lot bigger
than most people suspect. The numbers say that cash prescriptions
are 8 percent, but in actuality, when you add in the high deductible
portion of the marketplace, 20 to 30 percent of prescriptions are likely being
paid for outside of the consumer’s pocket. Focusing on these consumers first would
give Amazon the chance to prove itself and its capacity for
superior customer service without the complexity of dealing
with PBMs directly. And down the road, analysts speculate
that if Amazon acquired, partnered with, or became a PBM itself, it
could bring greater transparency to the industry. Eventually, the hope is
that consumers could compare pharmaceuticals on Amazon as easily as
they could compare tennis shoes, finally forcing the drug companies to
compete on price and quality. Whether it’s books, music or toys, Amazon
can take out a similar amount of cost out of prescription drugs as
they can in those categories. And largely speaking, that money goes
right back into the payer’s pocket, meaning lower prices for consumers out of
pocket and lower prices for a health care plan. While Amazon definitely isn’t the first
to try and simplify the pharmacy experience, it’s by far the largest. Beyond PillPack and Alto, a
number of other prescription delivery start-ups like NimbleRX and Capsule have popped
up in the last few years, but it will take time for them
to successfully operate in all 50 states. Amazon however, already has the infrastructure
in place to pack and ship goods on a massive scale. So for Amazon, I think this is all
going to be an easier process because they’re a huge company, they have
this massive logistical engine already in place. So I think they could come in and
essentially do a version of what many start-ups have tried to do before and do
it more quickly and do it better. Buck says it wouldn’t take long for
Amazon to get the logistics in place. From a technical perspective, from an
operational perspective, I think they could accomplish this in a
very short period of time. There’s no doubt that they could be
in the marketplace here within the next five years, operating a
standalone pharmacy that is offering competitive cash prices, starting to
build third party networks. And beyond delivery capacity, Gamache-Asselin
says Amazon could use their broad reach to solve fundamental
problems with transparency and coordination in the industry. We don’t expect Alto to be
the only pharmacy anytime soon. Our biggest problem is going to
be, helping drive systematic change. Amazon is a formidable company and given
their scale and their size, I think they’ll be an extremely helpful
disruptor and catalyst to bring some of those changes to life. Undoubtedly, taking on the complex pharmaceutical
industry will be a huge challenge. But Amazon has
lots to gain. By entering into the pharmacy market,
Amazon could be tapping into an opportunity that is worth
tens of billions. This is a massive market for them and
I think could propel them into the next phase of growth.

100 Replies to “How Amazon Could Disrupt Health Care”

  1. Lol putting monopoly everywhere. People love it cus its cheap 😂🤦🏽‍♂️then they will protest .. ITS TOO BIG its too CORRUPT

  2. you idiots really think amazon is in this to lower drug costs?? not going to happen! you will be squeezed even harder. Why on earth would the biggest company in the world do something to help people, they are doing it to get in on the insane profits

  3. The answer seems to be to get these "PBMs" out of the system. Doctor gives you a prescription, you visit your pharmacy of choice and hand over the script, pharmacy gives you your drugs, insurance pays up to a certain amount of the cost and you pay the rest.

  4. Amazon is clearly turning into a monopoly , it need the same solution as it was done to its predecessor Standard Oil

  5. That's the scariest thing I have seen in a long time.. Amazon with all your health data and control of your medicin.

    Besides it doesn't make sense to look at the global medicin market, there is a huge difference from country to country both regarding the healthcare system and the reach and usage of Amazon.

  6. No, they can't, they xan only undercut the competition, causing them to go out of buisness.

    That is amazons buisness model. Sell less by not paying taxes.

    Its worked. Up until 6 months ago.

    Then everyone figured out the Gambit.

  7. A lot of companies in India are trying to do the same but in India market is very different you self medicate a lot, a lot of other issues.

  8. Oh hell no, do it the right way with socialized medicine so the people have power over keeping prescription costs down. The whole problem we have now is corporate greed.

  9. You could buy from Amazon, but you don't have to buy anything from there if you don't want to. But if they help lower prescription prices, that's a win for all patients.

  10. Just proves you can do anything in America if you're willing to give government a cut. Kid across the streets getting busted with a joint while Grandma's getting Percocets dropped in her yard with a drone

  11. Yeah but there will be a delivery charge so if it cost $5 for your medication it now cost $15 for the service so if you can afford the cost of this service

  12. Other countries easily do Medicare for all but we wanna pay Amazon and have them dictate prices a company who made billions and got a tax refund!! Wtf? Lol

  13. So all the people locked up for selling drugs online….. now you can legally do it…Am I the only one who sees the hypocrisy?

  14. Pill pack is nothing. It takes years to build the buildings and train employees. Cvs, Walgreens, Kroger are at the top of the game. Amazon has a better chance to buy one of those companies. No way they can do it on their own.

  15. Recently I had brain surgery. I got a prescription filled I don’t care about where I get it. If I need it today I had to go to Kroger it wasn’t bad. But I can’t imagine having multiple a week or day. Hopefully amazon at least scares people making the prices cheaper.

  16. So basically a company that does an sells you everything an mails it to ur door no reason to put pants on an go anywhere

  17. Had to stop this stupid video cuz it triggered my Alexa like 10 times. Anyone with a brain these days know you need to mask the part of the audio where you say the trigger phrase otherwise it'll trigger viewers' devices. I got 2 of them, all of them got triggered, and they all were saying different things, one said if i wanna call a close by pharmacy, one asked me something about trivia game, I had to pause the video and wait for each of them done talking and then tell them to cancel.

  18. Amazon's non-prescription pills are cheap. $8 for 500 allergy pills. $25 for a year's supply of allergy nasal sprays. $5 for 500 Ibuprofen.

  19. As a current pharmacy student (maybe a dumb decision, but we'll see), I just want to acknowledge that something being easier for a person doesn't always mean better. I've seen a number of prescriptions written incorrectly from medical residents and even doctors. Pharmacists aren't trained to merely count by 5 and fill vials with the appropriate amount of liquid. It's a doctoral degree requiring a minimum of 6 years to complete, including pre-requisites, that covers a multitude of medical conditions and their treatments using both medication and lifestyle changes. Pharmacy care is a health service, not a product to be picked out from a line-up on a website.

    I will acknowledge that mainstay pharmacies have helped to create this problem by pushing unrealistic metrics and making unattainable promises. While joining with PBMs directly (cough CVS cough).

    However, medication costs are the real issue. Be careful what you wish for. If amazon does get into pharmacy, it'll put a great number of individuals out of work and further perpetuate healthcare disparities in low income areas. In almost every community a pharmacist is the most easily accessible health professional. Think about it, all you have to do is walk into a pharmacy and step up to the counter, no appointment, no insurance needed. De-fund pharmacies, and unfortunately the pharmacists go with them.

  20. i dont see why i need doctors permission to buy pills. if i wanted to get high then guess what… ill do crack. let me order pills online. at least companies can make sure none of it is laced.

  21. I've received wrong items from Amazon. imagine getting the the right label on the bottle but the wrong tablet inside. Even if you say the error is less than 3%. That is still catastrophic.

  22. Amazon may be the key to killing Pharma Companies and finally America can catch to other so called "1st world" countries who have a good healthcare system

  23. In 50 years from now, AMAZON WILL BE EVERYTHING.. even when you die they will bring you a last package / Coffin 2…

  24. I certainly hope Amazon smashes the pharma oligopoly into a million bits. Banting made insulin almost free for the struggling masses, and today people are dying due to rationing corporate-evil overpriced insulin with no innovation justification. Health is a human right, no one is asking for freebies, but fair competitive price is also a human right.


  26. just a new way to steal peoples information. Jeff knows your address and now he wants to know what pills you take

  27. Corporate healthcare will always be more expensive. Even a disruptor would only lower the price until they were established in the market. You need a single payer system to collectively bargain for lower price drugs

  28. For all you amazon bashers and liberal thinkers out there, Amazon has only provided benefits to consumers and small businesses. It gave us cheaper products and faster delivery, not to mention all the employees they hired. There are already so many competitions to amazon, in online retails, cloud computing, and advertising. What kind of real harm has amazon brought you? Don’t just sit there and speculating doomsday tales. You people just can’t stand to see someone else to be successful.

  29. I clicked on this Quickly…… I have a Relationship with Both Amazon And Healthcare….. Times sure are changing for us. Wow………

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