POV

Amazon Packs a Healthcare Punch with Latest Acquisition

July 3, 2018

What Happened?

Last week, Amazon announced that it acquired PillPack, an online pharmacy that was founded in 2013. PillPack’s differentiator lies in its name—the company sorts and combines medication in single-dose packaging, making it simpler and easier for individuals who require multiple medications to keep track of what they should be taking and when. PillPack has near-national reach, with a pharmacy license in every US state except Hawaii, and it already has relationships with several large pharmacy benefit managers.

It is being widely suggested that the PillPack acquisition was an easy way for Amazon to clear some of the regulatory and relationship hurdles that face anyone trying to enter the prescription drug fulfillment space. However, there is still a lot for Amazon to overcome, including how the eCommerce giant can navigate the tangled healthcare industry and still uphold the tenets it is famous for in other consumer goods: low prices, customer-centricity, and economies of scale.

No doubt Amazon considered all of this before it dove into the healthcare world—especially considering their previous false starts. So, while they’re getting the rest of the puzzle pieces in place, it’s time for pharma to start exploring potential marketing opportunities…

What’s Relevant for Marketers?

In an otherwise-eCommerce-fueled world, 90% of all pharmaceutical prescription transactions take place at brick & mortar pharmacies. However, Amazon’s power and PillPack’s offerings could represent a tipping point in the other direction. What could a rise in mail-order fulfillment mean for marketing?

(1) A gateway to improved adherence for long-term medications. Much like a monthly auto-ship for paper towels, Amazon removes two barriers to staying consistent with medication: remembering to refill and then actually picking it up. How can pharma endorse mail order in its marketing, make it easier for first-timers to get signed up, and help support the third-party services like Amazon that would be doing all the heavy lifting?

(2) Loss of personal support at the pharmacy. Pharmacists are increasingly playing the role of healthcare counselor and use of retail health clinics is on the rise with many demographics—no doubt a move by companies like CVS and Walgreens to protect their in-store market share. Despite the business intentions, pharma marketers must be cognizant of the medication-related questions that may go unanswered for mail-order patients (proper storage, side effects, adverse events, etc.) and find new ways to fill the support gaps.

(3) Increased demand for customer-centricity elsewhere in the healthcare experience. Amazon’s mission is to be “earth’s most customer-centric company”—healthcare has a lot of room to grow in this area. If Amazon manages to sprinkle its magic on prescription fulfillment, then it stands to reason that pressure will soon follow for the rest of the consumer healthcare journey to get its act together. We might see sizeable shifts toward telemedicine and on-demand disease support, which could ultimately lead toward patients who are more involved in their healthcare decisions. And while that will be a welcome day for all, it also will require pharma marketers to change the way they approach their communications: instead of trying to draw consumers in, how do we listen to what they’re requesting and quickly/effectively fulfill it? How do we shift from buying attention to delivering value?

What Should You (a Pharma Marketer) Do?

– First and foremost, take this seriously today. Even if Amazon needs a little more time to get something in market, its competitors will start making their countermoves soon to protect their customer base. Do some scenario planning that allows you to be on your toes when the time comes.

– Explore your target patient through this new lens. What would be appealing to them about a mail-order service? What barriers might they face to adoption? Can you help them overcome them? How can you provide surround-sound support once they’re enrolled?

– Start brainstorming innovative support ideas. For example, Alexa tasks like “Remind me to take ______,” is a good place to start (and smart whether Amazon is in the mix or not!) or virtual support tools that can assist patients when a live pharmacist may no longer be part of the picture.