Amazon plots big expansion of pharmacy business, adding same-day delivery in 20 cities next year

Amazon plans an aggressive expansion of its pharmacy business to offer same-day delivery of prescription medications to 20 new cities in 2025, which more than doubles its current operations.

Amazon Pharmacy announced Wednesday that it will open pharmacies in 20 new cities next year, including Boston, Dallas, Minneapolis, Philadelphia and San Diego. Amazon's pharmacy arm currently offers same-day delivery in 10 cities or metropolitan areas, including New York City and Los Angeles, and will have 12 markets by the end of 2024, according to an Amazon Pharmacy spokesperson.

Amazon is leveraging its vast logistics network and advanced automation technology to solve one of pharmacy’s biggest pain points: the lack of convenient, affordable access to medications, the company said in a press release.

The new pharmacies will be embedded in Amazon same-day delivery sites as the online retail giant leverages its logistics and supply chain muscle to make inroads in the pharmacy business.

Amazon Pharmacy customers already receive their medications in two days or less on average, according to the company.

By the end of 2025, nearly half (45%) of U.S. customers are expected to be eligible for same-day delivery of their prescription medications, Amazon claims.

"In health care, speed and accessibility are critical for positive patient outcomes," said Dr. Vin Gupta, chief medical officer of Amazon Pharmacy, in a statement. "There's often an important window of time after getting diagnosed when it's most vital to start your medication. At Amazon, we're using our world-class delivery capabilities to get medicine to patients within hours of being prescribed. This rapid access increases the likelihood patients engage immediately in their care and adhere to treatment routines, which is shown to improve health outcomes."

Amazon Pharmacy says its growth strategy relies on the development and launch of “modular” pharmacies of varying sizes. As Amazon Pharmacy launches pharmacies in new cities, they will be positioned within larger Amazon same-day delivery sites to allow Amazon clinical teams to manage the full prescription review and packaging process and then tap Amazon's delivery network and logistics capabilities to support rapid delivery, executives said.

 Integrating pharmacy shipments into the wider network dramatically reduces delivery time and creates opportunities to scale rapidly.

The new, smaller pharmacies complement Amazon Pharmacy’s existing, highly automated pharmacy fulfillment sites that feature robotic arms and other automation, overseen by a team of licensed pharmacists and pharmacy technicians. These large dedicated pharmacies are optimized to efficiently handle recurring prescription orders for customers who need medications regularly, plus provide rapid shipments to their surrounding metro areas. The flexible, modular strategy allows Amazon Pharmacy to provide prescription delivery on-demand across the country, according to executives.

"We continue to hear positive feedback about our fast medication delivery from customers and physicians," said Hannah McClellan, VP of operations, product and technology, Amazon Pharmacy in a statement. "Our data shows that when customers learn they can get their medications quickly, they are more likely to order them. It’s a surprisingly simple finding that shows how Amazon can support better health care engagement and adherence.”