“You’re not the customer, you’re the product.” — Tom Johnson
Patients have already expressed an eager willingness to accept prescriptions from Amazon.
Hospital pharmacies are quite proud of their “transition of care” program since it provides for continuous patient care. A transition of care occurs when a patient moves from areas with one acuity of care is provided, to an area where another acuity of care is provided. This may occur when moving from an ICU setting to a general floor or when going from an outpatient setting to an outpatient setting.
In the event of a transition of care, healthcare practitioners must ensure that all appropriate medications are started or stopped as necessary. For example, when going from a monitored bed to an unmonitored bed, medications that require continuous monitoring must be stopped. When transitioning from an inpatient setting to an outpatient setting, medications must also be transitioned to ensure that the patient can use them safely and appropriately whenever possible. There also has to be verification that the medications are covered by the patient’s insurance. This process is called a medication reconciliation and may be performed by a variety of healthcare practitioners. However, it is typically performed by pharmacists.
Although Amazon may show interest in helping patients with their transition of care, it is important to recognize that Amazon is a data company. It is more interested in patient data collection than in the typical practice of pharmacy. Assistance in the transition of care will enable Amazon to receive patient data both from within and from outside the hospital. Applying data to other potential sales may enable companies like Amazon to have better upsell conversions at the point of purchase. This is a far more intrusive function than pharmacy benefit managers (PBMs) and health insurers. PBMs and health insurers have only looked to defray or avoid losses by identifying ways to increase an individual’s premium based on their healthcare conditions. On the other hand, Amazon may look to use the data to increase profits by monetizing the data and enabling upsells at the point of purchase.
Amazon Prime Day
Amazon, in the last few years, has declared an annual summer sale that it calls the “Prime Day Sale”. It is Amazon’s version of a Black Friday sale, in the middle of summer. On this day they sell products at a discounted price. Pharmacies have long been known to offer coupons in exchange for switching pharmacies and to fill prescriptions. One must wonder if Amazon, in a future version of their pharmacy offering may include discounts on drugs and products (with valid prescriptions) to bring patients over and collect their data.
Mail Order Amazon
Mail order pharmacies work with, or may be owned by, PBMs and receive discounts that smaller pharmacies are not privy to. Amazon’s great purchasing power and distribution reach, combined with the Pillpack mail order format, enables Pillpack to obtain greater discounts. The savings from these discounts can then be either passed on to the patients or be rolled into the profit margin. This process could set Amazon up to be practically unbeatable when compared to other mail order facilities and smaller retail pharmacies who may not qualify for the greater discounts.
Amazon vs. DIR fees
Amazon’s reach and access to patients will set it up to especially combat potential PBM misconduct. Some insurers have begun charging direct and indirect remuneration (DIR) fees that have little to no recourse. Individual small to mid-sized pharmacies may have to pay such DIR fees to simply stay as part of the distribution network. However, Amazon’s own ability to set up a PBM, its ability to work well with PBMs, and Amazon’s access to patient info may enable Amazon to push back against DIR fees altogether.
Until Amazon make a move, it is difficult to tell what their actual plans in the healthcare industry are. Amazon’s clear motives as a data analytics company, its AWS servers, and its entry as a major marketing resource all position Amazon to win in the pharmacy business. If you have any questions about the ethics of the Amazon discounting medications on a Prime Day discount type sale, reach out to me on Twitter, LinkedIn, or on DarshanKulkarni.com.
I also host a podcast called Gavel and Pestle, a show dedicated to the fusion of law and pharmacy. You can listen to it here or search for the Pharmacy Podcast Network wherever you listen to your favorite podcasts.