- Amazon is selling an exclusive line of over-the-counter medications and health care items in a further challenge to traditional drugstore retailers, CNBC reports. Amazon didn't immediately return Retail Dive's request for more information.
- The line, Basic Care, is sold on Amazon alongside name-brand medications like Tylenol and Advil and private-labels like Kirkland and GoodSense, according to the Amazon website. The Basic Care line is produced by healthcare supplier Perrigo Co. plc exclusively for Amazon, and launched in August with 60 items — including pain relief, antacids, hair regrowth treatment and more.
- Amazon has reportedly received regulatory approval from about a dozen states to do business as a pharmacy wholesale distributor, and analysts at investment bank Leerink Partners in recent months have said that it's only a matter of time before the e-commerce giant makes a significant pharmacy play.
Amazon's major foray into brick-and-mortar via its $13.7 billion takeover of grocer Whole Foods has led to speculation that it could make a similar move in pharmacy. Cowen & Co. analyst John Blackledge late last year said that Amazon would do well to acquire Rite Aid. That would have garnered the e-commerce giant state pharmacy licenses and a drugstore infrastructure with pre-cleared regulatory hurdles, if grocery chain Albertson's hadn't beaten it to the punch this week.
Amazon could incorporate pharmacies into its Whole Foods grocery stores as well as into its Prime and Prime Now operations, Blackledge noted at the time. While it may not be able to snag Rite Aid, those operations could still prove handy for Amazon's healthcare plans.
The e-commerce giant already sells medical devices and employs executives to deal with health care-related regulatory issues, and it was previously said to be exploring how to ramp up its efforts in the pharmacy space. All of this has led Leerink to indicate a certain inevitability that Amazon will enter the space within the next two years.
Last month, Amazon, Warren Buffet's Berkshire Hathaway and JPMorgan Chase & Co. announced a partnership aimed at finding ways to address healthcare for their U.S. employees, with the aim of improving employee satisfaction and reducing costs. The initiative, several observers believe, would have implications for the entire American healthcare sector.
It's a tall order, but even the tentative, vague outline of a plan put forth roiled retail and healthcare players. Shares of CVS Health Corp., which dropped $69 billion to purchase health insurer Aetna in its own bid for expansion, plummeted on the news, along with those of insurers UnitedHealth Group and Anthem Inc.
Yet Amazon CEO Jeff Bezos hasn't shied away from tall orders. His company has put its focus where Americans put their money, and they put a lot of money into healthcare. U.S. health care spending rose 4.3% in 2016 to $3.3 trillion, or $10,348 per person, according to government data. "Amazon wants to be part of everyone's daily expenditures," Matt Sargent, senior vice president of retail for consulting firm Magid, told Retail Dive. "Grocery is the current focus of their attention, but healthcare spending is another very large pocket of spending that Amazon has its eye on."
Still, retailers like Walgreens haven't been all that worried. Last July, CEO Stefano Pessina expressed doubts that the drugstore and its rivals would have to contend with Amazon's entry into the prescription market.