Amazon Pharmacy Boasts Big Discounts for Prescription Meds, but Probably Isn’t the Best Deal
- Amazon launched Amazon Pharmacy, a delivery service for prescription medications.
- The service allows customers to purchase prescription medications with or without insurance.
- It boasts that Amazon Prime members can save up to “80 percent off generic and 40 percent off brand name medications when paying without insurance.”
- Experts say Amazon Pharmacy has the potential to improve drug pricing in the United States, but it likely won’t be a game-changer since it will work within the same system as other online pharmacies.
- Despite its boasting, Amazon Pharmacy pricing doesn’t really offer much of a discount.
Amazon’s blue delivery vans have quickly become ubiquitous around the nation, delivering everything to people’s doors, from essential daily items to live insects.
Now, the world’s largest online retailer run by the world’s richest man is getting even further into the U.S. healthcare market by offering to send prescription drugs to its customers’ doors.
In announcing the new venture on Nov. 17, Amazon said in a statement that customers can purchase prescription medications with or without insurance.
It boasts savings for its 100 million Prime members of up to “80 percent off generic and 40 percent off brand name medications when paying without insurance.”
That membership also includes unlimited, free 2-day delivery.
“We designed Amazon Pharmacy to put customers first — bringing Amazon’s customer obsession to an industry that can be inconvenient and confusing,” TJ Parker, vice president of Amazon Pharmacy, said in a statement.
On the site, Amazon users can compare the cost of drugs to see what’s covered by their insurance, while also giving the option of paying entirely out of pocket — sometimes the cheaper route, especially if coupons are available from the drug’s manufacturer.
Amazon does say it won’t be delivering any drugs listed under the Drug Enforcement Administration’s Schedule II controlled substances, which includes opioid pain meds.
It also only sells 30-day supplies, while other online pharmacies allow for 90-day supplies.
But outside Amazon’s own distribution structure and size as a company, many familiar with the way Americans get their prescription drugs say it has the potential to create meaningful contributions to lowering drug costs.
But, so far, it’s essentially another mail-order prescription drug delivery service and not tackling larger issues in the United States’ notoriously high-priced drug market.
“The larger issue is much more complicated,” Eric Levin, CEO of Scripta Insights, a service that analyzes data and identifies savings on prescriptions, told Healthline.
“Drug pricing is one of the most secret prices of them all in America. Just because Amazon has it, it doesn’t mean it’s going to be the best price or best for you,” he said.
Pharmacy isn’t Amazon’s first venture into prescription medications.
Amazon bought PillPack in 2018. That service is aimed at helping people manage their chronic conditions by receiving their multiple medications in presorted packages delivered directly to their doors.
Even then, as CNBC reported, pharmacy benefit managers (PBMs) — the middlemen between patients and insurance companies — were worried about Amazon entering the prescription drug market “because it’s really the only company that could conceivably break up their control if it were to jump into the distribution market and pressure drug manufacturers to lower prices.”
While lowering drug prices is often a bipartisan campaign promise, spending on prescription medications in the United States continues to grow.
According to a 2019 report by the IQVIA Institute, which tracks spending on medications, net medication spending in the United States will increase from $344 billion in 2018 to $420 billion in 2023.
But those familiar with the prescription drug market say Amazon won’t be a gigantic game-changer in what people pay for their prescription medications.
Levin said Amazon is merely “putting a Band-Aid on the enormous problem of prescription drug pricing” and will only “feed the beast and contribute to the drug pricing problem in this country rather than disrupting it.”
“While consumers will enjoy lower prices on their drugs, the discounts are still paid for by the same PBMs responsible for the exorbitant cost of drugs to begin with,” Levin said. “Ultimately, this service won’t do anything to reduce costs in our broken healthcare system.”
Part of that broken system is the public’s ability to fully understand all the forces behind what goes into drug pricing.
That’s due in part because PBMs, whose prices they negotiate for things like private insurance plans and Medicare Part D, aren’t transparent in what the true cost is for the drugs they buy for these plans.
They’re also highly criticized for needlessly increasing the price of those prescription medications.
“They make it harder to understand,” Levin said.
And since Amazon is using the PBM model, many skeptics argue it’s not bringing much new to the game in terms of revolutionizing the way people — whether they have insurance or not — get their prescription medications.
Filed under: General Problems
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