Amazon has unveiled a new subscriptions service that it says will allow Prime members to “receive all of their eligible generic medications for just $5 a month and have them delivered free to their door. Medications that treat more than 80 common conditions, such as high blood pressure, anxiety, and acid reflux, are included in the RxPass subscription.”
Here’s how Amazon introduces the new Prime benefit, called “Rx Pass:”
“Nearly half of adults take two or more medications each day, and one quarter of adults say they find it difficult to afford the medications they need. Amazon Pharmacy is tackling these challenges by making medications more accessible, affordable, and convenient. RxPass helps patients manage common health conditions – high blood pressure, anxiety, or acid reflux, for example – by providing reliable access to commonly prescribed medications, delivered with the ease and support customers expect from Amazon.”
The intro goes on: “With RxPass, Prime members can get as many eligible medications as they need for one flat, low fee of $5 and have them conveniently delivered free to their door. It’s estimated that more than 150 million Americans take one or more of the medications available through the RxPass monthly subscription. RxPass is our latest effort to help patients save time, save money, and stay healthy. It’s available now to customers in most U.S. states.”
This analysis from CNBC:
“Amazon has pushed deeper into health care in recent years. The company launched its own online pharmacy in 2020, a service that was born out of its acquisition of PillPack in 2018. Amazon introduced, then shuttered, a telehealth service called Amazon Care, and announced in July it would acquire boutique primary care provider One Medical.
“Amazon also offers a Prime prescription savings benefit, which offers a discount of up to 80% on generic medications and up to 40% on brand-name prescriptions.
“Amazon is beefing up perks for its Prime subscription program as CEO Andy Jassy looks to cut costs elsewhere in the company. Amazon has eyed laying off about 18,000 employees, while it froze hiring in its corporate workforce and axed some projects. Still, Jassy has said Amazon intends to keep pursuing long-term opportunities, including health care.”
The CNBC story notes that “RxPass doesn’t offer insulin or specialty medications, and it’s not available for people on Medicaid or Medicare.”
KC’s View:
This announcement suggests that while Amazon continues to make cuts throughout the company, its ambitions to make Prime as attractive as possible – because it leads to customer acquisition, which drives sales – have not subsided.
In many ways, this kind of move makes more sense than, say, the acquisition of MGM – it seems to me that giving Americans access to less expensive prescriptions is the kind of game-changing move that Amazon needs to be making. Much of the tech world is retrenching and rightsizing, and companies that continue to innovate are more likely to be rewarded.
However, I think it remains to be seen whether Amazon is going to be able to implement this and get scale to the degree that it needs to. So many of its healthcare initiatives have either been abandoned or have had minimal impact (is PillPack any bigger now than it was when Amazon acquired it?) that Amazon has some proving to do.
I’m not sure about the legal issues involved, but it is a shame that RxPass doesn’t offer insulin or specialty medications, and isn’t available for people on Medicaid or Medicare – this would seem to be fertile ground on which to grow a business centered on low-cost prescriptions.
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