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Will Amazon Change the Face of Online Pharmacies?

According to the PMMI Business Intelligence White Paper “Senior-Friendly Healthcare Packaging,” Amazon’s combined purchase of ‘PillPack’ with their joint-venture ‘Haven’ could create a “potential disruption and realignment in the healthcare industry."

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Prior to being purchased by Amazon, PillPack had carved out a niche for itself by pioneering the online pharmacy space with customized packaging and automated refill services. In 2019, Amazon began targeted offerings of the PillPack service with free delivery to select Prime members, focusing on a suite of medications for chronic conditions.

Haven, Amazon’s recently announced joint venture with JPMorgan and Berkshire-Hathaway, has so far only said it plans to “improve healthcare for the employees” of the three organizations. There is concern in the industry, however, that Haven intends to establish itself as a pharmacy benefits manager (PBM), negotiating directly with insurance companies to lower the cost of the drugs they purchase while providing a competitive advantage to PillPack.

CVS filed a lawsuit partly aimed at uncovering Amazon’s intentions, and while Amazon denied the PBM allegation, they also did not rule out the possibility of pursuing a future PBM model. Since CVS alone generates 60% of its total annual revenue - $116 billion annually – from their PBM operations, Amazon’s entry into the PBM market could “change the dynamics of the healthcare industry in profound ways,” according to the White Paper.

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