Amazon opens online pharmacy, shaking up another industry

Marketwatch photo illustration

The e-tail giant on Tuesday launched Amazon Pharmacy, its new online store which will allow customers to order prescription drugs directly to their homes.

The announcement sent shares of CVS tumbling 8.8 percent Tuesday afternoon, while Rite Aid plummeted 16 percent and Walgreens Boots Alliance was down 8.4 percent.

Through Amazon Pharmacy, customers will be able to speak to pharmacists 24/7 via the company’s site, and will give customers the option to compare prices of different drugs, as well as quickly switch between a co-pay and non-insurance option.

Customers who buy drugs with their Amazon Prime membership will also receive the same 2-day shipping available on all the company’s other products.

Prime members using the service will receive “up to 80 percent savings” on generic drugs when paying without insurance, and up to 40 percent on name brands, the company says.

The move arrives two years after Amazon’s $753 million acquisition of online pharmacy PillPack, which sorts its customers’ drugs by day and dose, and delivers the pills to its patients on a monthly basis.

PillPack will remain a separate service. Amazon Pharmacy is instead meant to save customers time and money instead of going to the pharmacy.

“We understand the importance of access to affordable medication [to those without insurance], and we believe Prime members will find tremendous value with the new Amazon Prime prescription savings benefit,” Amazon Prime VP Jamil Ghani said in a statement.

Amazon Pharmacy discounts will also work at brick-and-mortar pharmacies, with Amazon saying that it has partnered with more than 50,000 nationwide.

Shares of Amazon were up 1.1 percent Tuesday afternoon, trading at $3,164.20.

Published at nypost .com. Reprinted here for educational purposes only. May not be reproduced on other websites without permission from the New York Post.


1. The first paragraph of a news article should answer the questions who, what, where and when. (In this article, 1st and 2nd paragraphs). List the who, what, where and when of this news item. (NOTE: The remainder of a news article provides details on the why and/or how.)

2. What effect did Amazon’s announcement have on pharmacy stocks?

3. What services will Amazon Pharmacy offer?

4. What benefits will customers without insurance receive from Amazon Pharmacy, according to the company?

5. Amazon’s original prescription venture was the purchase of PillPack. Why will PillPack remain a separate business?

6. Watch VIDEO #1 under “Resources” below.
a) Investor John Ransom says that the big problem for retail pharmacies is not that Amazon is going to offer big discounts to people without insurance. Why isn’t that a concern?
b) What does Mr. Ransom say is the big question?

7. Watch VIDEO #2 under “Resources” below.
Based on this video, why won’t Amazon drive chain store pharmacies out of business? Explain your answer.

8. a) Do you support Amazon’s Pharmacy launch? Explain your answer.
b) What is your view of Amazon being your bookstore, electronics store, grocery store, cloths store, pharmacy and perhaps someday your TeleHealth doctor – at the potential expense of many businesses? Explain your answer.

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