When Amazon makes noise about entering the healthcare marketplace, the entire industry is primed (pun intended) to panic. The latest, and most concrete, move to date is Amazon’s acquisition of the innovative online pharmacy PillPack, which precipitated plunges in CVS and Walgreens stock. But is this panic justified beyond using it as an excuse for that bad Amazon Prime pun? It’s worth thinking through what Amazon could specifically do with PillPack. Here are four possibilities:
1. The Standard Amazon Consumer Experience Play
At least 100 articles have already been written about the PillPack acquisition that start with some variation of “Just as Amazon revolutionized the bookselling industry, it is now seeking to revolutionize healthcare industry…” The idea that Amazon will bring the same ruthless pursuit of a convenient, streamlined shopping experience to retail pharmacy that it’s already bought to many other retail industries seems quite likely. Indeed, PillPack provides a route to an even more differentiated consumer experience than Amazon generally delivers. Not only does PillPack make receiving prescription drugs more convenient, but the way they organize deliveries and packages makes the experience of using the product easier and drives better outcomes. This is doubly threatening to incumbent pharmacy players.
2. The Healthcare Bundle
Amazon already sells a number of health-related products, and its health-focused partnership with JP Morgan and Berkshire Hathaway suggests it may seek to expand that portfolio. Amazon could ultimately develop as a comprehensive healthcare marketplace, with everything from health and fitness products, over the counter drugs, prescription drugs, even telehealth, in-home, or convenient retail health services, and even forms of health insurance. Once Amazon develops this comprehensive ecosystem of products, they position themselves as the front door to healthcare, relegating everyone else to downstream vendor status.
3. Using Data to Sell Consumers More Stuff
Having prescription drug information will be another informative data point for Amazon. How they use persona health information is obviously more sensitive than standard retail data, but they will inevitably find a way to use it, and will likely leverage it to even better tailor offerings in and out of the healthcare space—for example if someone taking insulin is possibly interested purchasing a diabetic-friendly cookbook. This is concerning for healthcare organizations, but it should also be concerning for general retail organizations.
4. Or, Using Data to Save the World
Amazon could also use their growing multitude of data to better track the utilization and outcomes of drugs they sell. This could fuel improved research and development, serve as a foundation for value-based arrangements between manufacturers and payers identify previously unknown side effects or interactions, and just generally improve the healthcare system. (I hope Amazon is thinking hard about this one.)
There are obviously many directions Amazon can take, and these are just a likely subset. None will necessarily change the world tomorrow, but each has the possibility to greatly impact stakeholders and the healthcare marketplace in coming years.