Dental News - Amazon eyes pharmaceutical industry

Amazon eyes pharmaceutical industry

Judging from a recent move by Amazon, it might not be long before the online giant is delivering prescription drugs directly to the doors of millions of Americans. (Photograph: Jonathan Weiss/Shutterstock)

Dental Tribune International

Wed. 9. August 2017

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SEATTLE, U.S.: Amazon is not just a seller of books, bikes and electronic goods. It recently began distributing medical consumables too and now stocks catheters, infusion pumps, intravenous bags, infusion tubing and other disposables—not to mention wheelchairs, crutches and glucose monitors, to name only a few. However, the recent wide presence by the e-commerce Juggernaut at pharmaceutical trade shows indicates its intention to move into one of the largest and most profitable industries in the world today.

In a move that has been perceived by many as a warning shot across the bow of the pharmaceutical industry, Amazon has started advertising several jobs for health care-focused business development managers, solution architects and researchers. As reported on CNBC, it has expanded its Prime Now delivery service in Japan to include medication.

When news first surfaced about Amazon looking to move into the pharmacy business, Ann Hynes and Michael Pruell, analysts at Mizuho Securities USA, wrote: “While we believe AMZN has the resources to enter the pharmacy market, we do not think AMZN’s entry would be market disruptive.” They added, “While we again acknowledge AMZN’s resources, we think the company would face major infrastructure and regulatory hurdles if it were to compete in the pharmacy industry and it would be a major process for AMZN.”

This is not the first time the internet-based retailer has tested the waters in the pharmaceutical industry. In the 1990s, it bought 40 percent of Drugstore.com, although the deal ultimately fell apart and it was taken over by Walgreens and incorporated into its own operations. However, despite the confidence expressed by Hynes and Pruell that the impact of Amazon this time around would be minimal, the shares of retail pharmacy and health care company CVS Health briefly dropped by 3 percent when news was first released about the possible re-entry into the market.

Conceived as a blueprint in the e-commerce business, Amazon is now the model companies and industries want to replicate. With net sales of $136 billion in 2016, the potential for growth in the pharmaceutical industry, which generates an estimated $400 billion a year in the U.S., is significant.