Amazon signals entry to pharmacy jungle

It was back in June 2018 that eCommerce giant Amazon first signalled it was seriously interested in shaking up the pharmacy market when it bought full service digital pharmacy PillPack for over $US750 million. PillPack specialises in shipping prescription medications directly to patients, managing repeats on their behalf and has also developed an automated system to individually sort and label medications for patients to take by time and date.

PillPack has since run into a bit of trouble in the US following a decision by the country's largest electronic prescription exchange service, Surescripts, to end a data-sharing agreement with a third party that has effectively cut PillPack off from patients' medication history, but it's unlikely Amazon is going to give up. The US is the prime market but Amazon has since cast its eye wider, including to Australia.

As the Sydney Morning Herald reported last week, Amazon has registered the name Amazon Pharmacy for a trademark with IP Australia, citing online pharmacy retailing, prescription medication distribution and medication dispensers in the application.

US news site CNBC followed this up with a report this week that Amazon has registered similar applications for Amazon Pharmacy in the UK and Canada, with a PillPack spokesperson confirming it had also filed trademarks in Brazil, China, Egypt, the EU, India, Israel, Japan, Mexico, Singapore, Taiwan, Turkey and the UAE.

As the SMH points out, the Australian trademark application describes a pharmacy packaging service that “aligns, sorts and packages a patient's medications by date and time into individual packets”, which is what PillPack does, as does a new full service digital pharmacy that launched in New Zealand last week called PillDrop.

PillDrop offers a smart packaging service called Pill Sachets that pre-sorts doses into individual packets and delivers them to the patient's home or workplace. It is currently available in Auckland and plans to open in Christchurch later this year, although it is able to deliver prescription and OTC meds nationwide for a flat fee of $15. Standard prescriptions are free, with PillDrop waving New Zealand's $5 co-pay.

PillDrop also offers a personalised medicine diary that manages medication history and allows patients to fill their script, order repeats and order new scripts. A similar firm called Zoom Pharmacy also does this, with the patient giving the company permission to contact their GP and order repeats through the practice's patient portal. Zoom is backed by health insurer nib, which is offering members the service for free to encourage better medications adherence, and the pharmacy is also involved in a trial with Counties Manukau DHB.

In Australia, it's highly likely that similar services will appear now that electronic prescriptions are legal. There are a number of home medications delivery apps out there already – Tonic and PharmacyPal are just two – and most pharmacy banner groups offer a click and collect service or will deliver to some of their regular customers' homes. Popular app MedAdvisor allows patients to pre-order their meds and pick them up at a convenient time, Webster-paks are available for dose management and there's also good old-fashioned Australia Post for cheap deliveries.

What PillDrop does differently is individual sorting, packaging and labelling of medications, and this might be what differentiates Amazon's potential foray into the local market with PillPack, should it eventuate. With PBS subsidies it will be difficult to undercut existing pharmacies on price so the business case for Amazon, we imagine, must be cheaper, faster deliveries and added services like individual dose sorting. Brand name recognition for Amazon is a fait accompli.

How digital pharmacies co-exist with bricks-and-mortar pharmacies in Australia will be interesting to watch, particularly in light of the current negotiations under the 7th Community Pharmacy Agreement. Amazon has shown it can be ruthless in disrupting the retail sector globally, but it might meet its match if it decides to take on the might of the Pharmacy Guild.

That brings us to our poll question for this week: Do you think Amazon Pharmacy will find a market in Australia?

Sign up to our weekend edition or Pulse+IT Chat to vote, or leave your thoughts below.

Last week we asked: Will AI revolutionise medicine as we know it? 65 per cent said yes, 35 per cent said no.

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