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Amazon launches "Amazon Pharmacy", an online pharmacy store



Implications throughout the PBM industry

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From bookstores to cloud computing, Amazon will keep us guessing which industry disturb the next. Amazon aimed to disrupt the retail pharmacy industry, beginning with its acquisition of PillPack 2018, a mail order pharmacy that provides customized "daily delivery packages" for patients taking multiple medications. On November 17, 2020, Amazon announced that they are entering the pharmacy space with two new pharmacy products: Amazon Prime Prescription Benefits and Amazon Pharmacy. Amazon Pharmacy will give customers the opportunity to order prescriptions through their platform and receive delivery within a few days.

This announcement comes as many states begin to reintroduce COVID-19 restrictions and more Americans want to receive their medications by mail to avoid exposure. While this new offering gives consumers an extra access point to their medication, it is important to consider the implications of the pharmacy benefit industry.

Amazon focuses on providing solutions to reduce costs and provide effective access to medicines for both cash-paying and insured customers. The first component, Amazon Prime's prescription savings benefit, is administered by Inside Rx, a subsidiary of Evernorth. Evernorth is part of Cigna's recently revised healthcare offering that also includes Express Scripts (PBM). This program, exclusively for Prime members, provides savings at Amazon Pharmacy or at over 50,000 participating pharmacies nationwide. Large chains including CVS, Rite Aid and Walgreens participate in the program.

The Amazon Prime Prescription Savings Benefit offers customers without insurance significant savings of up to 80% on generic and 40% savings on branded drugs. For customers with insurance, customers also have access to the discounted cash price. However, prescriptions treated under the Amazon Prime Prescription Savings Benefit will be run outside of their insurance and will not apply to any applicable deductible or maximum.

The second component of this announcement includes a full-service business experience from a desktop or mobile device with Amazon Pharmacy, a new "store" on the Amazon platform. Customers can order or top up prescriptions and receive delivery with Amazon's 2-day delivery (free for Prime members), although some prescriptions can take up to 5 days with a shipping fee for delivery if a customer is not a Prime member. Consumers will have access to a variety of medicines including commonly prescribed medicines such as contraceptives, insulin, metformin and sumatriptan but will not supply Scheme II-controlled medicines that still leave a need for traditional pharmacy refill options.

How it works: [19659010] In collaboration with your doctor, patients can request that their prescription be sent directly to Amazon Pharmacy or request a prescription transfer to Amazon Pharmacy from an existing pharmacy. With a secure pharmacy profile, customers can upload their insurance information, manage their prescriptions and choose a payment method for any refunds. Savings for those without insurance can be offered via Amazon Prime cash discount cards and customers can choose to use flexible expense accounts (FSA) or health savings accounts (HSA) to purchase their prescriptions. We expect customers with insurance to be able to compare store costs in accordance with their insurance plan with those that are advantageous for Amazon Prime prescriptions.

Consequences throughout the PBM industry

The pharmacy's supply chain is complex. and because of this complexity, the price of prescription drugs is inflated, making both payers and patients feel the pinch. The focus on prescription discount card programs is increasing as one of the ways for payers and patients to deal with the "pinch". This market continues to grow, now with the entry of Amazon Prime joining GoodRx, Optum Perks, SingleCare, Blink Health and others.

Amazon has proven experience in leveraging logistics and technology to simplify operations, providing efficiency and cost savings. It is reasonable to predict that they will take the complexity of the pharmacy's supply chain and provide streamlined pharmacy improvements for both payers and patients.

While the idea of ​​a streamlined, cost-effective alternative to receiving medicines on the doorstep of a retail giant with enormous purchasing power may seem appealing, one must take into account when it comes to consumer data.

The current pharmaceutical landscape is full of consumer data. Patient information is collected and shared regularly between providers and pharmacies to manage and treat patients. This mass data is also collected to identify trends, manage healthcare costs, monitor drug use patterns, support healthcare planning care and quality management programs, and promote research and development efforts with both pharmacy benefit managers and third-party administrators (TPAs). Although data collection and analysis offer many benefits, it also entails an inherent risk of patient violations.

Things to keep in mind:

  • Will customers be able to compare more easily insured cash costs and pay rebates in the Amazon Pharmacy platform resulting in a larger shift to cash pay outside the pharmacy benefit?
  • In the current pharmacy landscape, health plans and PBM have limited views on cash-paying transactions that create data holes in their healthcare and quality management programs. [19659018] Will Amazon Prime bridge this gap working with health plans to provide a holistic view of drug use regardless of payment method?

Privacy over healthcare information is subject to HIPAA, the Federal Health Insurance Portability and Accountability Act, and Amazon Pharmacy will need to follow these rules just like any other pharmacy provider. While HIPAA controls what and how information may be used and shared, Amazon Pharmacy users may share this information either intentionally or unintentionally to facilitate the delivery of the threshold. The level of comfort between Amazon and buyers is high, so it is easy to accept a new pharmacy offer aimed at streamlining their daily lives. However, the question is how will Amazon Pharmacy use this information?


Scott Benefit Services is committed to providing our customers and partners with the most up-to-date information about this notice from Amazon. Details are still coming out and we will update when more information becomes available from Amazon as well as our PBM partners. If you have outstanding questions, contact your Scott Benefits Consultant.


Author

  • Sharon Montgomery
    BSPharm, MA, RPh, Chief Counselor
    Confidio


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