Amazon Pharmacy: How It Works

By Amit Chowdhry ● November 18, 2020
  • Amazon.com, Inc. (NASDAQ: AMZN) announced an easy and convenient way to order prescription medicine online. This is how Amazon Pharmacy works.

Earlier this week, Amazon.com, Inc. (NASDAQ: AMZN) announced a new service called Amazon Pharmacy. Through Amazon Pharmacy, customers in the U.S. will be able to order prescription medicines for home delivery, including free delivery for Amazon Prime subscribers. There has been speculation about Amazon launching this type of service for years now, but it became even more obvious when Amazon bought PillPack in 2018. 

Amazon customers over the age of 18 will have access to Amazon’s pharmacy services in 45 states starting this week. The five states that are not included yet are Hawaii, Illinois, Kentucky, Louisiana and Minnesota, but Amazon is planning to expand to those states eventually.

The Amazon Pharmacy service will accept most forms of insurance. And savings for medications will be offered to users without insurance as well. Plus customers can use flexible spending accounts or health savings accounts (HSAs) for buying prescriptions through the service. When users order medications for the first time, Amazon will ask questions such as gender, date of birth, and whether they are pregnant.

Doctors will be able to send prescriptions to Amazon Pharmacy directly and patients can also request transfers from existing retailers like Walgreens or CVS. And Amazon has tools for verifying that a physician ordered each prescription in order to prevent fraud.

Amazon Prime users will benefit from two-day delivery, but shipping could take up to 5 days the first time an order is made since it takes time to transfer a medication. But customers who do not have Prime can get free delivery within five days or pay $5.99 for a two-day delivery option.

Amazon Pharmacy will offer a mix of generic and brand-name medicines. This includes commonly prescribed drugs like insulin, metformin, sumatriptan, and birth control. However, Amazon is not going to deliver Schedule II controlled medications, including most opioids.

Plus customers who have questions about medications will be able to reach a pharmacy or pharmacy technician through phone or online self-service. Plus Amazon is going to screen for potential drug interaction issues who are taking multiple medications.

Amazon’s storage and collection of customer health information is in federal HIPAA compliance. And Amazon Pharmacy will not share pharmacy data with advertisers or marketers.

Going forward, PillPack will continue operating after the launch of Amazon Pharmacy. PillPack is generally used more for delivering medicines on 30-day schedules.

Amazon Prime subscribers are going to have access to prescription savings benefits. This includes discounts of up to 80% on generic medications and up to 40% discounts on brand-name medications.

How is Amazon able to offer these discounts? Amazon has relationships with the Inside Rx savings program (part of Evernorth). Evernorth is a company that emerged from the merger of Express Scripts and Cigna in 2018.

Prime subscribers will also gain a prescription savings benefit card that can be used at up to 50,000 pharmacies. This is beneficial for people who need medications urgently and cannot wait two days for the delivery.

Amazon Pharmacy does not have any brick-and-mortar location, but Amazon could potentially build pharmacies at Amazon’s stores like Whole Foods and Amazon Fresh.

KEY QUOTES:

“We designed Amazon Pharmacy to put customers first – bringing Amazon’s customer obsession to an industry that can be inconvenient and confusing. We work hard behind the scenes to handle complications seamlessly so anyone who needs a prescription can understand their options, place their order for the lowest available price, and have their medication delivered quickly.”

— TJ Parker, Vice President, Amazon Pharmacy

“As more and more people look to complete everyday errands from home, pharmacy is an important and needed addition to the Amazon online store. PillPack has provided exceptional pharmacy service for individuals with chronic health conditions for over six years. Now, we’re expanding our pharmacy offering to Amazon.com, which will help more customers save time, save money, simplify their lives, and feel healthier.”

— Doug Herrington, Senior Vice President of North American Consumer at Amazon

“We understand the importance of access to affordable medication, and we believe Prime members will find tremendous value with the new Amazon Prime prescription savings benefit. Our goal is for Prime to make members’ lives easier and more convenient every day, and we’re excited to extend the incredible savings, seamless shopping experience, and fast, free delivery members know and love with Prime to Amazon Pharmacy.”

— Jamil Ghani, Vice President, Amazon Prime