Amazon

Prime Members Say Yes To Amazon Prescriptions

A new study by Deutsche Bank has found that 85 percent of insured Amazon Prime members would buy prescription drugs from the eCommerce giant.

In June, Amazon announced it was acquiring PillPack, the pharmacy focused on people in the U.S. who take multiple daily prescriptions. That deal, along with its Prime service, which is expected to hit 275 million subscribers in the U.S. within the next 10 years, makes the company poised to take on a larger role in pharmaceuticals, wrote Deutsche analyst Lloyd Walmsley.

“Amazon has a history of starting small, testing the market and fine-tuning the service before launching a full-fledged commercial operation,” wrote Walmsley, according to CNBC. “As such, we believe it is a question of when and where — and not if — Amazon enters the healthcare space more forcefully.”

Amazon said it was drawn to PillPack because it is having a positive impact on patients’ lives. PillPack delivers medications in pre-sorted packaging, coordinates refills and renewals, and ensures shipments are sent on time.

“For Amazon, which has a … wide variety of healthy and organic grocery options at Whole Foods, and the ability to order items using voice commands (Alexa), we think the opportunity to upsell pharmacy customers to purchasing other items is substantial,” stated Walmsley.

In addition, Amazon has partnered with JPMorgan Chase and Berkshire Hathaway to work on ways to address healthcare for their U.S. employees, focusing on reducing costs and improving customer satisfaction.

“The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” said Jeff Bezos, Amazon‘s founder and CEO, in a press release. “Hard as it might be, reducing healthcare’s burden on the economy, while improving outcomes for employees and their families, would be worth the effort. Success is going to require talented experts, a beginner’s mind and a long-term orientation.”

Walmsley’s current price target on Amazon is $2,300, a more than 18-percent upside from Monday’s (Sept. 10) closing price.

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