Amazon Is Entering the Pharmacy Marketplace: What It Could Mean For You

Amazon announced two new pharmacy offerings for customers to purchase medications:

Amazon Pharmacy: a new store on Amazon that allows customers to purchase medications and manage insurance prescriptions.

Prime Rx: Amazon Prime members who do not have insurance can save money at both the Amazon Pharmacy as well as at over 50,000 other participating pharmacies nationwide.

Amazon Pharmacy Process


As with all Amazon services, the goal is to make it easy and convenient for the customer. If you have insurance, all you do is enter your name, birth date, and the last 4 digits of your Social Security number. After searching for a few seconds, Amazon pulls up your insurance information and prescription history. You then select your medication, purchase it, and track it. You can have your physician call in the prescription to Amazon, or Amazon will reach out to the doctor for you. Note: As of December 2020, Amazon does not allow manufacturer copay cards.

Amazon Prime Savings Card

  • The Amazon Prime prescription savings benefit is not insurance. It is included with Amazon Prime membership at no additional cost.

  •  The benefit provides savings on the price you pay for prescription medications if you are not using insurance. It can be used at over 50,000 participating retail pharmacies in the U.S. and Puerto Rico, including Amazon Pharmacy.

  • This card can be used at brick-and-mortar and mail-order pharmacies
  •  The savings benefit is administered by Inside Rx, a subsidiary of Evernorth (previously Express Scripts)
  • The card offers discounts of up to 80% on generic prescription medications and 40% on brand-name prescription medications
  • Benefit restrictions on select brand-name products exist for government-insured patients
  •  The copay card is not a direct competitor to manufacturer copay cards.
  • Customers cannot combine the Amazon savings benefit with their insurance


Currently offers greatest benefit to cash-paying or HDHP patients on generic medications

Amazon Pharmacy Promise

We know that Amazon is all about service, and service does not end with functional benefits. Its promise is grounded in universal insights and what you’d expect from Amazon – including protection of your privacy.

What’s in it for the HCP?


Amazon knows that the HCP is a key stakeholder to drive change in the healthcare space. Their For Prescribers page explains how simple it can be for HCPs.

Patients Options: Individual Bottles or Pill Packets

What’s Not Included: Products

  • Breast pumps
  • Compound medications
  • Diabetic testing and administration supplies (e.g. test strips, glucose meters, and pen needles)
  • Medical devices (e.g. braces, insulin pumps, and nebulizers)
  • Pet prescriptions
  • REMS medications
  • Schedule II-controlled medications
  • Suspensions (e.g. liquid amoxicillin or fluconazole)
  • Vaccines
  • Vitamins and over-the-counber (OTC) items

What’s Not Included: Service

  • Dedicated assitance with post-prior authorization processes, such as medical exceptions and appeals
  • Compatibility with drug manufacturer-provided copay cards and/or savings benefits

Market Reaction

When Amazon Pharmacy’s launch was announced, shares of major retail pharmacies and GoodRx plummeted.

What Experts are Saying about Amazon Pharmacy

Potential Impact

The Diffusion of Innovation (DOI) model describes how novel services and products get adopted in populations through:

  • Kinetics of the diffusion and through different segments (from early to late adopters)
  • Decision-making process to adopt

  • Factors that facilitate adoption

Kindle Analog

Kindle demonstrates the importance of a quick initial diffusion through early adopters as well as a strong secondary diffusion afterwards

Nov 2007: Amazon launches Kindle. Sold out in six hours

2007-2017: Barnes & Noble store-count drops. Amazon gradually starts selling more e-books than physical books Feb

2017: Amazon accounts for 80+% of e-book sales

Source: Tech Crunch. A decade of Amazon Kindle

Amazon Pharmacy Starts from a Strong Position

How to Determine the Impact on Your Brand


The easier it is to fill your script, the easier for your patient. To see if Amazon can have an impact on your brand, ask yourself:

  • Is your brand available at the Amazon pharmacy?

  • What age demo is your patient/caregiver?

  • Highest Amazon Prime usage exists in adults ages 18-35, which may indicate a faster adoption curve among the millennial audience

  • That said, penetration among 35-54 and 55+ age groups is estimated to be higher today than in early 2020

  • Do copay cards greatly impact patient choice? As Amazon Pharmacy does not take copay cards, this can negatively impact a brand if a patient wants to use Amazon services

  • Do you have a lot of cash-paying customers or ones on high-deductible plans who can benefit from Amazon savings?


Other Considerations


Amazon Pharmacy may…

  • Create an illusion of fulfillment help without the benefits of an SPP when it comes to cost and coverage 
  • Not provide services for government-insured patients to seek additional financial support from foundations, as traditional SPPs offer
  •  Create an expectation of lower pricing, with little payoff in the branded product space


Anticipating Opportunities


How might we capitalize on current and projected Amazon Pharmacy services?


Continue to educate the HCP on services regardless of their patient’s pharmacy – and anticipatepotential hiccups(such as copay cardincompatibility)

Paid Media

Promote branded PSPs when patients search product or product-related keywords (unconfirmed if and when Amazon would sell media)


Anticipate and plan for compatibility with PSP copay savings cards

Reach Expansion

Leverage Amazon Pharmacy services for cash-paying patients (e.g. Rx savings card)


Interested in our POV?


Please contact your account leads or if you have any questions or would like to discuss any of the above.