Global e-commerce giant and the world’s fifth largest company by market capitalisation, Amazon is continuing its expansion into the healthcare space with the launch of a five dollar monthly medicine subscription plan for Amazon Prime members in the US.
The plan, named ‘RxPass’ covers 60 generic medications used to treat over 80 common health conditions, including 16 of the USA’s 50 most prescribed medicines, according to Gizmodo. Amazon estimates that over 150 million people in the country currently take at least one of the medications available through RxPass.
Building on Amazon’s existing pharmacy offering, RxPass subscribers will get their medicines delivered to their doorstep for free. Amazon Pharmacy VP John Love estimates that the average Prime member would save around USD 100 per year with RxPass, although the plan will not extend to customers enrolled in Medicare, Medicaid or any other government healthcare program with a zero dollar co-pay.
In terms of who RxPass is aimed at, Love highlighted individuals with chronic conditions who pay for multiple prescription medications out-of-pocket. With the US National Center for Health Statistics reporting that 24 percent of Americans had used three or more prescription drugs in the last 30 days in 2018, and 12.8 percent taking five or more, this could add up to a sizeable number of patients,
Love also added that the RxPass model is “fundamentally different” from what has gone before in the US pharmacy market, with greater transparency as to medicine pricing.
“The bulk of scripts Americans get are administered the same way they have been for decades,” he stated. “The patient drives [to the pharmacy], they stand in a communal environment…and they find out the price at the point of care.”
However, Advisory Board queries just how revolutionary Amazon’s model is, noting that “Paying a discounted cash rate for generic medications is not a new concept. While Amazon RxPass is utilizing a subscription-based, all-you-can-eat buffet approach, it’s similar enough to Walmart’s $4 prescription program or other cash pharmacies.”
They add, “we’re keeping an eye on Amazon RxPass—not because of its potential for disruption in the pharmacy market, but rather as a glimpse of how Amazon is approaching its overall healthcare strategy… “It’s unclear whether RxPass is intended to drive profits for the organization, or if its goal is more strategic. Even at scale, it’s hard to picture how this incredibly low-cost model would drive substantial profits.”
Amazon has bolstered its healthcare portfolio in recent years with moves into telehealth, drug delivery, fitness trackers, and cancer research, as per Reuters. The firm acquired online pharmacy PillPack back in 2018 to establish a prescription delivery and price-comparison site, while its latest move puts the company in direct competition with established pharmacy chains like CVS and Walgreens.