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Amazon's Push Into Pharmacy Business Is Full of Promise and Pitfalls

A move by Amazon.com Inc. into the $412bn pharmacy business would shake up how generations have gotten their medicines, but success could prove elusive even for the ever-expanding e-retailer.

People familiar with the matter confirmed that Amazon is considering entering the business. The U.S. market for selling prescription drugs appears ripe for an e-commerce makeover. Every year pharmacies in the U.S. dispense about 4.5 billion prescriptions. Patients pick up about 9 out of 10 prescriptions at a retail pharmacy, much the same way their parents did decades ago, even though their doctors likely sent their prescriptions to the store electronically.

Consolidation of the drug supply chain in the hands of a few big players has also been criticized by many patients and drug manufacturers, who are looking for new ways to buy and sell medicines.

Retailers including Amazon may be “sensing there is a significant discontinuity, a shift, about to occur and it is time to jump in,” said Pratap Khedkar, who heads the pharmaceuticals practice at consulting firm ZS Associates.

But while filling drug prescriptions online may be a big, inviting target for Amazon, it would pose very different challenges than selling books, toys and videogames, say industry experts.

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People familiar with the matter confirmed that Amazon is considering entering the business. The U.S. market for selling prescription drugs appears ripe for an e-commerce makeover. Every year pharmacies in the U.S. dispense about 4.5 billion prescriptions. Patients pick up about 9 out of 10 prescriptions at a retail pharmacy, much the same way their parents did decades ago, even though their doctors likely sent their prescriptions to the store electronically.

Consolidation of the drug supply chain in the hands of a few big players has also been criticized by many patients and drug manufacturers, who are looking for new ways to buy and sell medicines.

Retailers including Amazon may be “sensing there is a significant discontinuity, a shift, about to occur and it is time to jump in,” said Pratap Khedkar, who heads the pharmaceuticals practice at consulting firm ZS Associates.

But while filling drug prescriptions online may be a big, inviting target for Amazon, it would pose very different challenges than selling books, toys and videogames, say industry experts.

Opens external link in new windowRead Full Article