Image of wooden canoe on Amazon River with caption reading “Amazon Ventures Further Into Consumer Healthcare”
… The Amazon Rainforest represents about half of the Earth’s remaining rainforest and constitutes its single largest reserve of biological resources.…

Amazon’s New Online Mail Order Pharmacy “PillPack” Is Underway

John G. Baresky

PillPack / Amazon is pushing further into consumer health with prescription drug and mail order pharmacy services

Amazon has been exploring the healthcare industry for much longer than many realize and is poised to strike with one of their most ambitious and unique ventures to date. A gradual increase of activity conveys PillPack / Amazon are launching their quest to forge deeper into the competitive mail order pharmacy sector of healthcare.

PillPack is an ideal platform for Amazon to build its pharmacy initiatives on…

While the purchase price of PillPack in 2018 was initially thought to be around $1 billion, Amazon paid about $753 million for it and since then fortified it with additional commercial, clinical and operational capabilities.

Competitive snapshot…

Their total number of mail order pharmacies is considerably fewer than what the leading mail order pharmacies / PBMs in the United States operate. Express Scripts (owned by health insurer Cigna) has 15, OptumRx (owned by UnitedHealthcare) has 18 and CVS / Caremark (which owns health insurer Aetna) has 26.

Costco, Kroger, Walmart, Walgreens and other retailers also operate mail order pharmacies as do insurers like Humana, Kaiser and various BCBS plans (Prime Therapeutics is a mail order pharmacy / PBM owned by 22 BCBS plans).

Although they are a different business model and consumer experience, retail pharmacies are also part of the overall competitive landscape PillPack operates within.

Having a limited number of mail order pharmacy facilities is not necessarily a weakness for PillPack…

Based on these details and the established experience Amazon possesses in CRM plus shipping logistics to residential and business locations, PillPack has substantial resources in operations and other areas to draw from. As they generate more business, they can enrich the capabilities of their existing pharmacy operations or expand into more and / or larger facilities.

Market access / in-network pharmacy provider status…

Fortunately, PillPack / Amazon will not have this issue to deal with initially. They are in an excellent position to compete for the prescriptions of patients with pharmacy/healthcare insurance coverage across the nation. PillPack is an in-network pharmacy provider with many of the leading PBMs and MCOs including:

  • Aetna
  • CastiaRX
  • Cigna
  • CVS Caremark
  • EnvisionRx
  • Express Scripts
  • Humana Pharmacy Solutions
  • MedImpact
  • OptumRx
  • Prime Therapeutics

This access includes being eligible to fill prescriptions for many of the larger Medicare Part D plans. Before being acquired, PillPack had done an admirable job of contracting with numerous PBMs and managed care plans before the acquisition to strategically develop a sound pipeline of customers so business momentum was established much earlier.

PillPack’s geographic limitations are of limited but potentially concerning consequence. While they are licensed as a pharmacy provider in all 50 states, they do not ship to Hawaii or international destinations at this time. For benefit plan members residing in such locales, this is a disappointment, as it will also be for some specialty pharmaceutical manufacturers as well.

PillPack and Amazon successfully combined consumer, healthcare and digital marketing expertise to develop a quality website user experience…

The simple, effective design makes it easy for consumers to navigate the site, understand how PillPack works and conveniently register for mail order pharmacy service:

  • Promotes free shipping and service; customers are charged only their copay
  • Has its healthcare journal, “Folks”, with wellness and other health-focused articles (an excellent example of effective outreach/content marketing strategy) for customers
  • Displays numerous customer reviews and satisfaction ratings
  • Fully operational online patient registration plus email and iPhone app communications
  • Live customer service support on weekdays and weekends
  • Access to a pharmacist is available 24 /7
  • Payment accepted via HSA and FSA accounts is noted upfront
  • Alternative payment plans are offered

PillPack provides prescription transfer service and has a patient management program for those customers taking specialty medications. Their accreditations include URAC, VIPPS and other endorsements.

Getting the word out to consumers about a new mail order pharmacy provider that is part of Amazon…

  • PillPack television commercials began appearing in the Fall of 2018
  • Amazon Prime members ( over 100 million ) are receiving emails featuring links to PillPack landing pages; some have received PillPack flyers within their package shipments
  • PPC ads are actively running
  • Facebook ads are actively running
  • Amazon’s website now features a PillPack page
PillPack and Amazon Combined Graphic
PillPack and Amazon Combined Graphic

Future options for PillPack and Amazon in the healthcare sector…

  • *There are 500 Whole Foods stores operated by Amazon; could they use them somehow in driving PillPack’s business from a retail vantage point?
  • Amazon Prime Same-Day and One Day Delivery; can PillPack align itself with this convenience in the future?
  • Haven, Amazon’s healthcare partnership with Berkshire Hathaway and JPMorgan Chase, is staffing up; how may they align their work with PillPack’s capabilities?
  • Alexa is being outfitted with HIPAA-compliant features and messaging; how may it support PillPack patients once these new features are in place and refined?
  • Amazon’s consumer marketing, recommendation selling, logistics management and other resources are enormous; how may these be deployed within PillPack?
  • What rules/standards may Amazon and PillPack have to define and enforce between themselves so patient privacy laws and regulations are always complied with?
  • How may their relationships with pharmaceutical manufacturers, payers and employers evolve?
  • May Amazon Web Services / AWS have plans to expand its EHR data mining software, Amazon Comprehend Medical, concerning PillPack and/or yet unnamed healthcare services and/or partners?

Moving forward…

Ongoing innovation by pharmaceutical manufacturers with new bio-therapies and other chronic care medications provide incredible gains in inpatient care but also boost costs. As prescription drugs eventually go generic, transaction amounts and cash flow drop accordingly which leaves less wriggle room for even small gains. The ongoing drive to eliminate rebates and chargebacks issued by pharmaceutical manufacturers further complicates the abilities to turn a profit.

While PillPack and Amazon will experience challenges as they blaze a new trail, their innovative strategies to welcome and support consumer healthcare customers with a high level of service and ability to operate their pharmacy enterprise better than competitors may be more than enough to give them a winning edge.

Thank you for reading this story

Read my other articles about medical and healthcare business trends, content marketing and digital strategy, brand and product management, consumer wellness, managed care and market access strategy. Contact me today for your healthcare content writing and content strategy needs.

I have over 20 years of experience in the healthcare industry producing valuable healthcare content for audiences and customers spanning physicians, nurses, pharmacists plus pharmaceutical companies, medical technology manufacturers, healthcare provider organizations, managed care, investors, consumers and other stakeholders.

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As a healthcare content writer, my work aligns with an organization’s voice, brand, SEO elements, marketplace and objectives. It establishes trust in their company and recognized value in its products and services that generates revenue.

This experience was earned through working at Walgreens, Pfizer, AbelsonTaylor, TAP (Takeda Abbott Partnership), Hospira Worldwide and Boston Software Systems. ​

To a large degree, my professional interests emulate my family which includes doctors, nurses, physician assistants and other clinicians plus those that are working in healthcare administration and commercial enterprises.

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