What do you feel when you hear Amazon Pharmacy is coming to Canada? Fear? Frustration? Annoyance? Perhaps you feel excited because you are curious to try the service? Feelings aside, the reality is, once the mega giant launches its online pharmacy services in Canada, your pharmacy business will be impacted. Amazon Pharmacy Canada is here to disrupt the traditional retail pharmacy business.
Amazon is a multinational conglomerate that has become one of the most powerful and feared companies. Few companies can compete with Amazon’s logistics and shipping operation. Its incessant focus on customer experience and two-day Prime member shipping helped Amazon gain the top position in Canadian e-commerce market with a net sale of US $7,136 million in Canada (2020), with Walmart.ca in second place with US$3,155 million (1). Amazon’s current success in e-commerce is relevant to pharmacy because it is sculpting the way consumers choose to shop.
With the current pandemic, many physicians are continuing to conduct virtual visits with patients, which forces learning. The growth of the mail order pharmacy market, as you can imagine, is attributed to the increasing occurrence of chronic diseases and the convenience of delivery. There is some evidence showing a link of using mail order pharmacy and increasing medication adherence in patients with diabetes (2).
It is inevitable that our lives are ingrained with technology and traditional pharmacy will need to adapt to succeed. We can either bury our heads in the sand or face the challenge head on. Personally, I am curious about the patient experience. After viewing a couple of US patient experiences through YouTube and digging into articles that speak to Amazon Pharmacy in the United States, I have summarized some key takeaways:
Efficiency: It is no secret that robotics and automation in pharmacy provide speed and accuracy. To achieve efficiency, Amazon has acquired PillPack, a mail order pharmacy, to deliver its pharmacy services in the United States. PillPack fills and delivers tear-off packets that are broken down by the time of day the medications are to be taken (6). PillPack uses robotics and automation to package pre-sorted doses and save on the cost of labour. Given that machines are performing the repetitive aspect of dispensing, pharmacists are freed to spend more time with patients discussing their medications.
Quick delivery: Free 2-day delivery for Amazon Prime members is appealing to many people because it is so convenient. Especially during a pandemic, one can stay in the comfort of his/her home without having to leave the house. This service targets patients with chronic illnesses who do not need the medication immediately. Free 2-day delivery is attractive for patients who are stable and just require renewal of their existing prescriptions. Traditional pharmacy does not offer more value than Amazon Pharmacy for this group of patients. This group of patients usually makes up the bulk of most pharmacies’ business.
Ease of use: The patients who reviewed their Amazon Pharmacy (USA) online experience said the process of signing up and filling prescriptions was simple and easy. Knowing that some or most of your current patients are already Amazon Prime members, you should anticipate that they may switch to Amazon Pharmacy Canada once it launches. Some reasons that your patients will switch are the ease of use, the convenience of delivery, and the potential of discount pricing on their medications.
Discount pricing USA: Amazon Pharmacy USA has the economies of scale to greatly discount medication prices for patients who do not have drug coverage. There are many patients in the US who may benefit from Amazon as pricing of medications in the states can be astronomical. I am curious to see what Amazon Canada can do when it comes to pricing of medications once it launches in Canada.
Amazon Pharmacy trademark application has been accepted by the Office from the Government of Canada (3). It is nerve racking knowing that this behemoth of a competitor will have almost unlimited resources and cash to ruthlessly take market share.
What we know for sure is that, in the future, robotics and automation will likely take on the labour-intensive parts of dispensing. This means that many pharmacists' jobs will be replaced, and retail pharmacy landscape will change. Where traditional pharmacies will thrive is by offering clinical services such as vaccinations, medications reviews, and prescribing for minor ailments. Patients will still visit their local pharmacy for services that mail order pharmacy cannot provide such as OTC recommendations and immediate prescription fills.
No matter how you slice it, Amazon Pharmacy Canada will come. It is not a matter of if but when. Are you ready to adapt to ensure your business is sustainable with the arrival of the mega giant?
Jane Xia is principal consultant with Cedar Health Consulting.
Ramachandran, B., Trinacty, C.M., Wharam, J.F. et al. A Randomized Encouragement Trial to Increase Mail Order Pharmacy Use and Medication Adherence in Patients with Diabetes. J GEN INTERN MED 36, 154–161 (2021). Retrieved October 6, 2021,https://doi.org/10.1007/s11606-020-06237-8