Amazon Preps To Sell RX Online

Amazon.com has won approval from several state pharmaceuticals boards to become a wholesale distributor.

Citing public records, the St. Louis Post-Dispatch reported that Amazon has gotten the nod for wholesale pharmacy licenses in at least 12 states, including Nevada, Arizona, North Dakota, Louisiana, Alabama, New Jersey, Michigan, Connecticut, Idaho, New Hampshire, Oregon and Tennessee.

The paper reported that an application for a license is pending in the state of Maine, and that in North Dakota, it appears Amazon is also allowed to distribute medical devices and/or medical gas. In the case of the Nevada license, the application states the types of products that Amazon will handle include “legend pharmaceuticals, supplies or devices and hypodermic devices,” reported the Post-Dispatch. On the Nevada application, the box that indicates the ability to handle controlled substances was left unchecked.

For weeks now, speculation has abounded about when, not if, Amazon will enter the online pharmaceutical market. In a research note recently issued to clients, Leerink analyst Ana Gupte predicted it will decide before Thanksgiving. “We are convinced that AMZN will almost certainly enter the drug distribution value chain within two years, evolving into a more disruptive offering over time,” the analyst at the brokerage firm said.

According to CNBC, as well as a source familiar with the situation, when Amazon decides to make the move, it will expand its senior team complete with drug supply chain experts.

It isn’t surprising that Amazon would consider this move, as analysts have estimated the U.S. prescription drug market at $560 billion per year. Amazon is well aware of the complexities, and typically spends years researching opportunities before making final decisions.

Goldman Sachs has speculated that the eCommerce giant will ultimately work to improve price transparency for consumers and reduce out-of-pocket costs. And another news report last month revealed that Amazon was considering getting into the mail-order pharmacy market, potentially targeting people who are uninsured or have high deductibles and pay cash for prescription drugs. Pharmacy executives said it would likely take 18 to 24 months or even longer to obtain drug licenses in all 50 states.