Making pharmacy more 'Amazon-like': PillPack founder details tech giant's push into drug delivery

Amazon shook up the retail drugstore market when it acquired PillPack in 2018 and then again when it rolled out Amazon Pharmacy last year.

The online retail behemoth is again ramping up competition in the pharmacy space by launching new features on Amazon Pharmacy that make it easier for customers to compare prices on prescription drugs.

As part of the Amazon Prime prescription savings benefit, Prime members can search for a drug and compare the price of it at Amazon Pharmacy and more than 60,000 pharmacies nationwide that accept the discount benefit. That prescription savings benefit could save members up to 80% off generic and 40% off brand-name medications when paying without insurance, Amazon Pharmacy executives said in a blog post.

Customers also can now check their insurance co-pay price before ordering a medication on Amazon Pharmacy.

Shares of drug discount company GoodRx fell in morning trading Tuesday on news of Amazon Pharmacy's new drug price comparison tools.

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The new features are part of the tech giant's push to give consumers what they want: "More Amazon, less pharmacy," said TJ Parker, vice president of pharmacy at Amazon and one of the entrepreneurs behind PillPack.

Parker co-founded PillPack in 2013 along with Chief Product Officer Elliot Cohen. Parker's family operated a mom-and-pop pharmacy, and, while studying to become a pharmacist, he and Cohen developed the idea for a startup that would make it easier for people to buy prescription drugs online and manage their medications, Parker told Erin Brodwin, health tech correspondent at Stat during the virtual Stat Health Tech Summit 2021 this week.

Amazon bought PillPack for a reported $1 billion in cash.

Parker and his team at PillPack were interested in eliminating the "wonkiness" of interacting with pharmacies and making the process as seamless and convenient as shopping and browsing for other products. Selling to Amazon offered an opportunity to tackle that challenge, he said.

Amazon Pharmacy launched the new prescription drug price comparison tools this week to give customers the information they need to make informed decisions and put consumers in the driver’s seat about what’s the best medication for them, Parker said.

"The fundamental bet we made when we launched Amazon Pharmacy is that customers wanted pharmacy to work just like Amazon across all those other categories. We've been working from there to make pharmacy truly as seamless to use as for other categories and we want it to look and feel as easy to use as," he said. "We're on the very beginning of that journey and now continuing to make it more Amazon-like."

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Amazon's Prime prescription savings card is administered by Inside Rx, a subsidiary of Evernorth, of which Cigna's Express Scripts is also a subsidiary,  a company Amazon once battled with over access to patient medication history data.

Amazon Pharmacy wants to partner with other players in the healthcare ecosystem to build a better customer experience, Parker said.

"If other partners, whether pharma, payer or PBMs (pharmacy benefit managers) are offering something better to customers, we are willing to partner and are partnering with them," he said. "We are seeing a shift happen in what was historically an antagonistic and zero-sum relationship. If we're both offering more compelling solutions then our business will do better and we will help the customer understand pharmacy better and make that more tangible."

Parker added, "The only real path forward is to work with folks inside the ecosystem to build customer-centric solutions."

Brick-and-mortar, independent and mom-and-pop retail pharmacies will continue to have a unique value proposition in the market, Parker said, but the COVID-19 pandemic accelerated the trend of meeting consumers where they are, and that is driving growth for online pharmacies and medication delivery.

"This is not a one-time blip. Consumers will continue to demand the convenience of virtual visits and at-home medication delivery," he said.

"We're going to continue on this path to invest to make pharmacy more and more Amazon-like with a focus on the convenience of the product, lower prices and broadening the selection of options. So using the Amazon playbook and applying those principles to pharmacy," Parker said.