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How Pharmacists Can Survive Amazon

17 Sep 2018 6:14 PM | Anonymous

How Pharmacists Can Survive Amazon


Darshan Kulkarni Pharm.D, MS, Esq.

Amazon has made several recent moves including hiring new health IT experts, and physicians to make a big foray into health. Their recent disclosure that they want to enter the pharmacy world and their recent acquisition of PillPack makes pharmacists go - what does this mean for me? Will there be a reduced need for pharmacists?

As Global Positioning Satellites (GPS) became increasingly popular, the demand for cartographers dropped significantly. Digital maps created and updated in real time compared an individual’s current location to their desired location and told the individual how to get to the final location. Cartographers began to worry about their jobs and livelihood. Amazon’s overtures into pharmacy have similarly concerned pharmacists. However, since the concerns are similar, maybe the results will be too. There is a projection that between 2016 and 2026, the demand for cartographers will increase by 19%. This is attributed to an increased use of maps by government planning such organizations and the realization that there are some responsibilities that cannot be automated and delegated away. Similarly, pharmacists who hope to operate like they did 20 years ago are unlikely to survive. However, those who adapt, would likely be very much in demand.

What Amazon taketh away, Amazon may also giveth

Amazon has rarely been a manufacturer. Amazon typically connected businesses with potential clients and served as a marketplace. The marketplace originally started as being a place for them to sell their wares, but eventually expanded to become the Amazon Marketplace where anyone can use Amazon as a virtual store and sell their goods. As most know, goods sold by sellers on Amazon often compete against goods sold by Amazon itself, and the orders may often even be fulfilled by Amazon. Amazon has been happy to do this because they still make a profit with such an arrangement. So, one must wonder whether the pharmacy of the future will become a competitor to PillPack or will instead partner with them.

Accordingly, pharmacists may be able to compete or deal with a post-PillPack pharmacy in one of the four following ways:

  • 1)     Amazon Marketplace

Competing against PillPack in the near future will likely require demonstrating specialization and knowledge. Cartography grew because of the creation of Hyper-Local Communities (HLCs), These HLCs looked at the location of the nearest Dairy Queen but also looked for shops surrounding the Dairy Queen? This was unable to be achieved by large mapping companies. In the case of pharmacy, pharmacists could develop a specialization by connecting with unique providers or providing unique services or simply products that cannot be easily mailed. This may include veterinary prescriptions, schedule II drugs, specialty drugs, emergency antibiotics, compounding or providing uniquely personalized care.

  • 2)     Delivering Services

While Amazon has excelled at delivering goods, it has not demonstrated expertise in delivering services. As a result, CVS and Walgreens are looking to capitalize by partnering or hiring nurse practitioners or other mid level professionals and enabling them to engage with patients. Because these providers may be more likely to educate their patients at the pharmacy, diagnosed patients may find fulfilling their prescriptions on site to be more convenient.

  • 3)     New Partners

Pharmacists traditionally think of Prescription Benefit Managers (PBMs) as their enemies. However, despite PBMs and Group Purchasing Organizations (GPOs) who are all supposed to theoretically help patients by keeping costs down, pharmacists feel squeezed and don’t have enough of a margin. With a new Amazon entrant, a pharmacy may now effectively assert that PBMs, GPOs and Pharmacies are likely to perish if they don’t survive together. Accordingly, this may enable better pricing opportunities and better opportunities for patients.

  • 4)     Branded Prescriptions

Being a pharmacist in the Amazon Marketplace may enable prescription fulfillment across the state if not the country. Amazon Marketplace may enable a pharmacist sitting in New York City to sell a prescription to a patient in Albany. In some cases, the pharmacy itself may deliver to the new patient, or create a new category of “celebrity pharmacists” who simply are trusted to provide appropriate care, while a PillPack may do the actual fulfillment and delivery of the prescription.

Concerns

While Amazon’s entry may provide interesting partnering opportunities, it is important that pharmacists consider relevant laws. The stark, anti-kickback, False Claims Act and civil monetary penalties law will each come into play. Accordingly, pharmacists hoping to partner with other providers, but should be careful with such endeavors since it may expose them to potential legal liability.

The Future

It seems likely that a push by Amazon into pharmacy may impact individual pharmacists who may see a decrease in patient volumes. This is likely to scare pharmacies and pharmacists. However, it seems like this may be a temporary situation and lead to more opportunities in the future.

If you are interested in hearing more about how Amazon affects pharmacists, the implications of an Amazon Pharmacy and patient centricity, or how Amazon’s Prime membership discounts might work with medications, search for the Pharmacy Podcast Network wherever you listen to your favorite podcasts or reach out to me directly on Twitter (@DarshanTalks).

 

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