Following Amazon’s acquisition of PillPack in June, Morgan Stanley Analyst Javier Martinez noted that the eCommerce retailer could take on the drugstore market in Brazil. Such a move could bring competition for Brazil drugstore operator Raia Drogasil SA, which is already planning to open 240 stores, Bloomberg reported.
“We argue that investors should start considering potential pharmacy disruption from Amazon,” Martinez wrote. However, he added that Amazon is not a threat in the short- to medium-term. At the same time, he noted the retailer would have to overcome complicated regulatory and logistics hurdles. Still, he noted that “complexity doesn’t mean that it can’t be done, just that it may take longer.”
In June, Amazon announced that it had inked a deal to acquire PillPack, the pharmacy that caters to people in the U.S. who take multiple daily prescriptions. PillPack delivers medications in pre-sorted packaging, coordinates refills and renewals and ensures shipments are sent on time. Terms of the deal were not disclosed at the time. In a press release, Amazon said it was drawn to the company because it is having a positive impact on patients’ lives.
Jeff Wilke, an Amazon executive, said in the release, “PillPack’s visionary team has a combination of deep pharmacy experience and a focus on technology. PillPack is meaningfully improving its customers’ lives, and we want to help them continue making it easy for people to save time, simplify their lives and feel healthier. We’re excited to see what we can do together on behalf of customers over time.”
For months, speculation had abounded about Amazon’s entrance into the healthcare and pharmacy markets. While the eCommerce giant had initially planned to sell pharmaceutical products via Amazon Business, its unit that sells bulk products to businesses, they ultimately decided against it. In April, CNBC, citing people familiar with the matter, reported that Amazon found the pharmaceutical market more challenging than anticipated. As a result, the eCommerce giant is now focused on selling medical supplies to hospitals and smaller clinics via its Amazon Business service.