How Amazon could Disrupt Pharmacy Services
Ever since Christina Farr of CNBC broke the news of Amazon expressing an interest of getting into the Billion Dollar Pharmacy market, I have been having multiple conversations with many people inside and outside of pharmacy on how this will change "everything."
Personally, I haven't seen this much attention in awhile about pharmacy since PillPack made strip-packaging of medications mainstream three-years ago, and am quite eager to see if this is really going to change the current paradigm of pharmacy services.
Nonetheless, having Amazon as a disruptive player in the pharmacy sphere is worth having some thoughts about, for those inside the pharmacy space and outside have some very different takes on the matter. For one, most pharmacists really don't see Amazon getting into the space for a few more years, and not much changing if they do. Rather, it's just 'one more mail order pharmacy.' But those outside of pharmacy, see a drastic change in the landscape. I think this difference in views comes down to several items. If you are interested in those, please read on, otherwise if you want to see how I think Amazon could change things skip ahead.
The primary issue is what is pharmacy and drug dispensing in the 21st Century United States. It definitely isn't the apothecary from "A Wonderful Life," or the cozy independent store in the center of town with a telephone operator in the back and a soda shop up front. Rather, it is the hectic fast paced drive-through endeavor with a 15-minute wait feature that most patients after visiting their doctor see. Pharmacy has drastically changed, and with the patient view of most pharmacists just 'Count-Lick-and Pour' medications for patients it's not hard then to think of how to just automate the process. Which, to be honest, is a thing right now. Many large pharmacy operations now use automation technology (whether a community pharmacy or a hospital) to aid in the process of dispensing medications. It's what makes a large scale mail-order pharmacy operation possible. And it's also what makes some start-ups consider making corner pharmacies (or Redbox Pharmacy as I like to call them) a thing to the place outside of Emergency rooms and clinics. So yes, for the general public, the view of just having Amazon mass dispense medications is a no-brainer. How hard is it really?
Now those in pharmacy will point to other issues, which are pharmacy problems that I don't expect the general public to be concerned about or even know. One issue is that the dispensing process is not a full-proof system at the current time. Even with CPOE and Electronic Prescriptions, there are still multiple issues with prescribers getting the right drug to the pharmacy. We still are using fax machines, which I often joke we need to have a class on for students in healthcare to understand how to use. Insurance issues (the bane of most patients showing up to the pharmacy) is another, with prices being a constant headache for patients and coverage understanding by prescribers along with requests for prior authorizations and claim denials. This all requires communication by the pharmacy team between providers, patients, and insurers to get medication to the patient. Suddenly a 15-minute wait becomes a 2-day endeavor of back and forths and miscommunication. That's why even with large mail-order pharmacy operations, there are more people staffing the call-center than out on the floor of the dispensing process. Amazon being Amazon doesn't mean this problem will go away. Rather, it's a new area that Amazon is going to have to learn to deal with and address (which hopefully includes a good leadership team knowledgeable about current practice and realities of the pharmacy, or better yet, teaming up with a PBM or similar partner to get into the space). It's not impossible, it's feasible, but we need to reasonable about expectations that the public seems to have.
Second, along with some of these issues, is the regulatory laws in place. This is a branch of pharmacy that most of the population is unaware of until there is an actual legal problem. There is a federal pharmacy law, along with each state having the right to be more stringent. For patients that travel frequently and try filling their medications in another state, this is often where they come across a problem. So, where many are apt to say "Well the Taxi industry never took Uber seriously, and pharmacy is in danger too," I think most pharmacists nod their head with the understanding that it's not an issue of Amazon getting into the pharmacy space, but rather, it's not going to be a cut and dry system that most people expect.
But let's put this all aside. What would happen if Amazon got into the pharmacy space, what could they do differently?
For now, I am going to go along with potential drivers in the Digital Health space and other health care ideas that Amazon could latch onto.
The pharmacy component could be pretty straightforward with a few options, including going into a distributor role (such as Cardinal Health), creating an online pharmacy with a mail order service, or even using the new WholeFoods locations to open up physical locations. Each has pros and cons of services. For instance, a physical location offers the ability to offer vaccinations and filling of same-day needed prescriptions (such as antibiotics, pain medications, etc.) after seeing a doctor visit. Some may say that it could be possible to do 24-hr medication dispensing services, but that may be hard pressed depending on how many centers that Amazon could open and a reasonable delivery time (such as a rural setting).
However, just having a place to dispense medications from I feel would be self-limiting. In an era of big data, how could Amazon tap into a users data flow to find out their health and target specific services to them? Tracking their search histories, online data habits, and the 'golden egg,' their health data from say an insurance company would allow Amazon to do a lot.
Putting this all together, this could be one possible model of how this all ties together.
And, this is an example case of how it could work for a patient that uses Amazon services. It really isn't hard to predict integrating Alexa and wearable devices into a patient life to encourage physical fitness, adding telemedicine services when needed, and just having Amazon address patients health needs via a platform.
So with that, I welcome any thoughts or comments. I am particularly interested to see what else could be done.