Drugstores like Walgreens and CVS make the bulk of their money on prescription drug sales.

But that may soon change.

Last month, Amazon bought PillPack for about $1 billion and is poised to push further into the healthcare industry as a vendor of prescription medication.

Walgreens and CVS may be worried. But should you be?

 

What is Amazon’s PillPack service?

PillPack is an online pharmacy that delivers prescriptions right to your door.

Medication arrives pre-sorted and guaranteed on time. Customers can use online tools to track packages and order refills.

Now that they’ve bought PillPack, Amazon may be free to do what it always does — take a slim profit margin in order to undercut prices and beat competitors.

 

What does the future of pharmaceutical sales look like?

Amazon will probably move fast once the deal with PillPack closes later this year, similar to what we saw when Amazon bought Whole Foods — prices were immediately slashed on certain Whole Foods items, thanks to Amazon.

Based on this precedent, drugstore pharmacies have good reason to be nervous if Amazon can fill prescriptions for less money and make it more convenient than them.

 

Amazon’s over-the-counter drugs are more than 50% cheaper than Walgreens — same for prescriptions?

Amazon already is beating drugstore prices on generic medication — why not beat pricing on prescriptions, too?

Last year Amazon launched Basic Care — its line of generic over-the-counter medication — with many common meds coming in cheaper than what Walgreens or CVS offers.

Walgreens store-brand acetaminophen is $15.99 for a bottle of 500 pills. Amazon’s Basic Care sells the same product for $6.63.

CVS-brand cough syrup is $5.79 while the Amazon Basic Care version is $4.62.

Based on this trend, the most obvious benefit is that you might get your prescriptions for less than you’re paying at your current pharmacy.

 

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But what if you need medication quickly, like an antibiotic for strep?

Amazon’s prescription service seems to be best for recurring prescriptions.

For example, if I could get my son’s asthma medication sent to my house and it saved me a trip to Walgreens every few months, that’d be golden.

But when your child gets strep or another illness that can’t wait even 24 hours to treat, there’s not much Amazon can do — unless Prime Now somehow gets involved.

 

How will this work with Amazon’s new healthcare company?

Even more recently, rumors have been flying about Amazon opening up their own primary health care clinic to serve its employees in the Seattle area.

Plus, last January, Amazon partnered with Berkshire Hathaway (Warren Buffet’s company) and JPChase Morgan to “disrupt the healthcare industry” in order to make it more affordable for their combined workforces.

We predict we will see more developments along these lines about what this will mean for you and for drugstores as time goes on. We will keep you posted!

 

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Amazon Will Be Selling Prescription Drugs Soon — and Raises Some Big Questions