Seeing yet another space ripe for disruption, Amazon is launching Amazon Pharmacy—an online pharmacy for Amazon Prime members. With over 100 million Amazon Prime subscribers in the U.S., Amazon Pharmacy could quickly become a critical source of prescription medications for tens of millions of patients. So what does this mean for pharma companies, marketers, and patients?

Data Opportunity and Sensitivity

Data privacy aside, this latest announcement would theoretically bolster Amazon’s knowledge about our online (and offline) behavior—what shows and music we prefer, how often we shop for new technology, what we ask our computer, and now what prescriptions we fill. For pharma marketers, Amazon Pharmacy could provide a new source of data to better understand prescription writing and filling activity and potentially a richer source of data about the patients. Amazon’s wealth of data could, in theory, help connect an individual’s activity level, the food they buy/eat, and the medicines they take—creating a trifecta of wellness support unparalleled by any pharmacy, hospital, physician, or insurance company today. How they leverage this data, and to what degree it can be accessed, de-identified, and matched, will ultimately dictate the usefulness for patients and marketers alike.

Pricing Pressure

While all signs point to continued increases in advertising expenditure over the next few years, pricing pressure and shrinking margins could slow the expected growth in spending—although with a majority of sales teams still grounded due to the pandemic, other funds may be freed up for marketing activity. Similarly, with many physician offices still limited/closed, it is likely Amazon will add telehealth services to their Pharmacy suite. It will be interesting to see how other pharmacy retailers respond.

Increasing Customer Expectations

Similar to the steps CVS took a few years ago to become a more well-rounded healthcare destination, Amazon Pharmacy’s entrance to the space will increase competition and is likely to set a new standard of expectation between customers and pharmacies as well as patients and pharma manufacturers. The trend toward seamless experience, personalization, and ease of transaction will continue to increase among patients. Pharma marketers would be wise to take note of this expectation, ensuring it is reflected in their paid, earned, and owned communication efforts.

Leading Destination for Health Services

Amazon has always brought sellers and buyers closer. Their platform connects consumers to chat about a product, review experiences, share photos, and make recommendations. How will this translate to an online pharmacy? Will we be able to see reviews of a treatment and chat with others about their experience? Platforms like this exist today, but mainly in the form of online discussion forums and niche, condition-oriented sites—nothing on scale with Amazon. Furthermore, this type of centralization around the treatment of a condition could increase the likelihood patients turn to Amazon as a source for information on healthcare-related topics, shifting the endemic publisher landscape and creating new advertising opportunities for marketers. Think about the implications for established players such as Healthline, WebMD, GoodRx, Teladoc, and more. How will these spaces react? We’ll find out.

  • Michael Deichmiller

    Michael Deichmiller is Group Director, Integrated Planning at Butler/Till. Michael has over 10 years of experience working with clients in the healthcare industry including expertise in pharma, health insurance, and hospital/health system marketing. He’s focused on monitoring and understanding key developments that impact marketing opportunities for Butler/Till’s diverse set of clients, helping them to drive business outcomes.

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