Greg's Corner

Is Amazon getting ready to enter into the pharmacy market?

If you have health insurance you might be familiar with having your prescription drugs being delivered by mail. Many health insurers use pharmacy benefit managers, PBMs for short, as middlemen between the pharmaceutical companies and the consumers. The PBMs determine which prescription drugs are covered under you insurance and at what percentage. Many of these PBMs encourage prescriptions to be filled by them to be mailed to the consumers. They offer some pretty substantial discounts to customers who use this procedure. Now, rumors are circulating in the business world that online home delivery giant Amazon is looking to enter the PBM market.

There are pros and cons to Amazon moving into the pharmacy space. One of the pros is that this will offer more competition, as the PBM scene is ruled by only three companies, CVS, Express Scripts and United Healthcare. More choices for consumers is always a good thing as it could lead to competitive pricing for prescription drug coverage. However, the con could be that if Amazon does enter this market it could actually result in less competition as Amazon has a history of not being to fond of any competition.

The even bigger problem with Amazon entering into this space is Amazon’s usual problem of trying to be all things to all people, a faceless global corporation that pervades itself into every facet of our lives. Is that what we really want, because that scenario benefits no one except Amazon. If we’re not careful Amazon could become a mega-monopoly with no one to challenge them.