Amazon Needs to Fill More Prescriptions
The only business Amazon hustles after as much as grocery is health care. Both bring customers with regular, frequent needs, and present data and logistical challenges that Amazon presumably can solve with ease. Both constitute major pieces of the US consumer economy.
Amazon has had limited success in its efforts to win the grocery business. It has truly struggled to make an impact in consumer healthcare. We see this in, among other places, Amazon’s efforts to sell prescription drugs to its existing customers.
Amazon began a dedicated prescription drug business with Amazon Pharmacy in 2020. That followed its purchase of PillPack in 2018. The announcement of Amazon Pharmacy initially spooked its competitors, or at least their investors, as stock prices for CVS, Walgreens, and others dropped, reducing their market values by billions of dollars. Since then, Amazon has barely dented the US prescription marketplace.
Among US Amazon customers, only 1% report filling their last prescription at Amazon, either through Amazon Pharmacy or PillPack in the past year (Chart 1).