- This week Amazon launched its new Amazon Pharmacy service, selling prescription and generic medications.
- Prime members will get a bunch of perks, including huge discounts of up to 80%.
- By selling healthcare, Amazon Prime is getting into a market where consumers are keenly aware of how sensitive their data is, which means it will have to walk a fine line to maintain public trust.
- Visit Business Insider’s homepage for more stories.
Amazon launched its new service Amazon Pharmacy on Tuesday, which means the company will be selling both prescription and generic medication to its US customers via its website.
The move was not unexpected; industry watchers have been expecting Amazon to move into delivering medications since 2018, when it acquired drug-delivery startup PillPack. The company has also been pushing into healthcare more generally since then.
Amazon Pharmacy is the first big splash that consumers are likely to really notice, however, and Prime customers will get a handful of big perks. Amazon Prime members will get two-day delivery on all medication, plus discounts of up to 80% when they don’t use insurance. Amazon will also allow them to compare whether it would be cheaper to buy drugs using insurance co-pay or to just rely on Amazon’s bargains.
The move fits Amazon’s MO of trying to be the go-to place for everyday purchases and driving customers to its Prime programme. However, it’s also going to have to tread extremely carefully not to spook Prime customers who might worry about their data privacy.
Read more: Amazon just put the entire healthcare industry on notice with its latest push into pharmacy. Here’s who stands to win and lose.
Analysis by consulting firm cg42 suggests that out of the Big Tech companies, Amazon is the most trusted when it comes to user data privacy. Out of 1,500 people surveyed in July 2020, 42% said they trust Amazon with their personal information. The next most-trusted tech company was Google with 28%, while Facebook came in last with 16%.
Stephen Beck, founder of cg42, told Business Insider Amazon Prime’s launch into healthcare has the potential to tip the scales in the eyes of Prime customers, who are used to accessing Amazon Prime to buy basic retail goods and watch shows on its streaming service.
“It’s going to be really interesting to see if this is a bridge too far,” said Beck. In general, he expects the cost benefits to outweigh privacy concerns for the average Prime member – but Amazon will have to walk a fine line to maintain public trust.
“But it’s really the first time for Amazon that they’re going to be getting into a category where the consumer is going to stop and think before they move,” said Beck.
Gallery: I used Amazon’s new pharmacy to get my medication. Here’s how it works. (Business Insider)
I used Amazon’s new pharmacy to get my medication. Here’s how it works.
I decided to use Amazon’s new pharmacy to get my medication delivered. I recently moved and I spent two months in Michigan this year, meaning I’ve had to change my pharmacy multiple times to get my medication. Amazon appealed to me because I wanted the ability to change my delivery address quickly without using a new pharmacy.
First, I checked to see if Amazon would deliver my medication. The website lists a number of items the company does not deliver yet, including medical devices, controlled substances, and vitamins, but it seems to deliver most drugs.
Next, I checked to see if the medication would get delivered to my apartment in New York City. The website says Amazon does not yet deliver in Hawaii, Illinois, Kentucky, Louisiana, or Minnesota.
There are two down sides to the Amazon Pharmacy that I noticed right away: The company does not offer 90-day fills, nor does it automatically refill prescriptions.
After reviewing the website, I went to sign up for an Amazon Pharmacy account.
The company asked me to create a health profile using my name, address, birthday, and the last four digits of my social security number. I already had my address saved in my Amazon account, which sped up the process.
I then added my insurance information. I recommend getting your insurance card and pill bottle before starting the process so you won’t have to get up and look for them.
I had to disclose the name of my medication, any allergies I had, whether I was pregnant or nursing, and other health conditions.
The process to sign up for Amazon Pharmacy probably took me a little over 5 minutes total.
I then had to call in my prescription to Amazon Pharmacy. The company said the fastest way to request a prescription was to call my doctor’s office and inform them of my new pharmacy. Amazon could also request it for you by contacting your current pharmacy.
My dermatologist’s office was not immediately available, so I opted to use Amazon’s service. The company said it could take up to six days to order my medication.
I didn’t feel like waiting that long, so I decided to wait for my dermatologist to get back to me. The office was busy, but I got a virtual appointment with her and she sent my prescription to Amazon within two days.
During checkout, I added my address and selected my payment information (even though I had $0 copay with insurance). You can also add an FSA or HSA card as a payment method.
I don’t have Amazon Prime, so the checkout website said I would have to wait nine days to get my medication to qualify for free shipping. Amazon’s website said non-Prime members qualify for “free 4-5 day delivery,” but the checkout window told me otherwise. Prime members can get free two-day delivery.
I was all set, and got my prescription ordered without paying a delivery fee. Shortly after I purchased the prescription, Amazon texted me saying my medication would arrive in five days. Luckily I have enough pills to last me that long, but I would be hesitant to select this service if I needed my medication right away.
After completing the process, I’m happy I don’t have to leave my house to get my prescription, but the delivery time is an issue. Still, I was disappointed by how slowly Amazon Pharmacy worked, both to request prescriptions and ship them out. I’m planning to order my next refill in advance to ensure I get the medication I need on time. If the delivery continues to take this long, I will probably send my prescription back to my local pharmacy.
“Buying a Halloween costume on Amazon, you’re not really worried about the data implications,” he said. “[Watching] ‘The Man in the High Castle,’ again, not really worried. But your asthma medication? You’re going to actually give it some thought,” he said.
Read more: Amazon’s first-ever plan for its new pharmacy business, which included partnering with Pfizer and J&J, highlights the challenges and ambitions of the secretive business
To keep people comfortable when using Amazon pharmacy, the company is also going to have to make a departure from its usual business model. Normally, Amazon uses user data about its customers to push them towards other purchases, flagging up items they might also want to buy. If it wants to keep trust in its pharmacy business intact, it will have to resist falling into the groove of its usual business model.
“Is the person who’s taking high blood pressure medication going to be open to blood pressure monitoring devices appearing in their Amazon recommendation? That’s going to feel weird,” Beck said.
Forrester analyst Arielle Trzcinski also said in a blog post that pharmacy recommendations could trip Amazon up – although it could equally present an opportunity.
“Data privacy concerns abound, but individuals are increasingly open to sharing data if value is given in return. Pharmacy data might yield recommendations on low sodium foods or workout equipment for hypertensive customers,” Trzcinski writes.
“At the end of the day, [Amazon Pharmacy] means consumers will need to be comfortable with Amazon knowing even more about them — and the ‘creepy factor’ may be difficult to overcome,” she added.
Beck also believes Amazon Pharmacy will open the company up to more government scrutiny on how it processes data.
“When you look at the way that they can assimilate information across an individual’s life, that is a different dynamic, and one that I think will come under heightened scrutiny, especially because now they’ve gotten into the healthcare space and you have to start to think about HIPAA [Health Insurance Portability and Accountability] laws,” he said.
Amazon is already being heavily scrutinized over how exactly it folds data collection into its business model, with investigations ongoing in the US and the EU. These investigations are more heavily focused on how Amazon uses third-party seller data, rather than the ways Amazon assimilates data about individual users.
In the press release announcing its pharmacy service, Amazon tried to quell any fears around privacy, saying it “securely manages customer information in compliance with HIPAA, and does not share Protected Health Information outside of the pharmacy for advertising or marketing purposes without clear permission from the customer.”
Time will tell whether this be enough to reassure consumers, governments, and privacy activists.