Amazon building 'modern pharmacy' of the future: Medical Officer

Since 2020, Amazon (AMZN) has been making efforts to extend its online retail stronghold into the pharmacy world. The company announced that it expects same-day pharmacy delivery services to become available in up to a dozen US cities by the end of the year. Amazon Pharmacy Chief Medical Officer Dr. Vin Gupta joins Wealth! to discuss the move and what the current state of pharmacies lacks for the average consumer.

"If your provider can get that prescription in before, say, 5:00, we're able to get that to your door before the end of the evening," Gupta explains. He highlights the importance of this service for consumers with acute conditions, saying, "that time to treatment is critical."

The service will not have additional charges for same-day deliveries, "and that's exactly what people expect from Amazon," Gupta says. "We know that 30% of people don't pick up their refills on time, or if ever, because it's an inconvenient experience, especially if you're not feeling well," adding that he believes Amazon's new initiative will make major strides in the average consumer's health.

The service will have a different sign-on and portal experience, keeping health data separate and private from users' retail profiles. Gupta explains that it will also offer several different ways to pay with or without insurance, touting a discount savings program and automatically applied manufacturer coupons.

He adds that in addition to the home delivery service, a team of clinical pharmacists will be available 24/7 to answer any patient questions.

"We're truly building the modern pharmacy that the future needs," he tells Brad Smith and Anjalee Khemlani.

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

This post was written by Melanie Riehl

Video transcript

While shopping online dominates retail, about 90% of consumers, they still purchase their medications in person at Pharmacies since 2020.Though Amazon has been trying to gain a foothold in this market even announcing this year, it expects same day delivery services for your meds to be available in up to a dozen US cities.But for the consumer, a major question is how much this will actually affect the overall price of prescription medications.For more we bring in Vin Gupta who is Amazon Pharmacy's Chief Medical Officer, as well as our own Angelique Kamlani, uh, uh, Doctor Gupta, first and foremost here.A lot of people are just wondering what the Delta and the prices that they're paying will be when they're thinking about a same day delivery type of service versus going in person to some of the pharmacy benefits managers and picking it up the old fashioned way and the way that many of us have been accustomed to for decades at this point.Well, Brad, first of all, thank you for having me and I great to see you again.This is a service that we're launching in select cities across the country.We'll have 12 by the end of the year.We're really excited about it because we know that cities like New York City and Los Angeles, the two New cities where we have this capability.If you, if you get that prescription and if your provider can get that prescription in before, say five o'clock, uh, we're able to get that to your door before the end of the evening and that matters for acute conditions.And this is something that we're going to be growing again across the country.But that time to treatment is critical Brad.We've talked about this so much during the pandemic, early triaging, early diagnosis paired with early treatment, we can be at the door and people are used to Amazon being at the doorstep with their retail needs.Now we're doing it for health care and we're building that trust.Uh What about the cost of it to, to Brad's point?Are they, are patients expected to pay any different?Is insurance covering all this?And are we looking at, you know, sort of a status quo in that realm or is it more expensive even though it's more convenient for patients to use Amazon?Now where, where we offer it, uh it it it's included in, in, in just in the checkout experience.So no additional charge for that sub same day delivery experience.Uh and that's exactly what people expect from Amazon.If, if this is something where you're in a in Staten Island, in Manhattan, in parts of Brooklyn Queens, this is something that will be offered to you, um, in the checkout experience and something that again, if you're within that serviceable zip code, we will offer it no additional charge.Then tell me when you're talking about the in person pick up.I know that just like Amazon's past, when bookstores were the target, we're now looking at pharmacies and the in person pick up part of that equation for pharmacies.And we look at what the, um, you know, the, the push is to mail order and online ordering that hasn't necessarily picked up, uh, to the point of that stat that we shared.But at the same time, Amazon is opening some of those in person locations.What does that tell you about the market right now?And sort of the trust that people have in digital versions of health care?Well, I'm, I'm a pulmonologist, Angela as you know, and, and home delivery of medications to me is an area of incredible growth because it means something meaningful.It's useful significant to clinical outcomes.We know that 30% of people don't pick up the refills on time or if ever because it's an inconvenient experience, especially if you're acutely not feeling well.So home delivery us being the modern pharmacy meeting the needs of the modern age, we're doing something we exist for a reason because the existing legacy pharmacy experience isn't meeting those needs.And so, yes, 10% to your exact point.Let's acknowledge the fact, 10% of prescriptions are through home delivery.90% are sold through that legacy system where people spend hours every year in line in aggregate waiting for their medications to get picked up up.We are providing an alternative for patients and for their providers across the country.I'm at the bedside if I know that my patient who is not feeling well with the COPD exacerbation can get their refills on time or their antibiotics on time that same day in a place like New York City, why wouldn't I want to do that?So I think part of this is just building the awareness that there's a better alternative home delivery, the modern pharmacy for the modern needs to the patient.Now, we need to start moving away from the legacy system that isn't meeting those needs.Is Amazon able to negotiate materially different with drug makers to the extent that your customers, prime members subscribers or not, would be able to see the Delta and what they're paying or you know, whether they were going to be purchasing that via pickup uh through one of the PB M competitors or through Amazon.Well, Brad, what I'll say is we have created a storefront experience that, that might be evocative if, if you've used amazon.com for your retail needs.Amazon Pharmacy, very different uh uh portal experience, fine or an experience.We keep health data separate and private from, let's say if you have a retail profile.Uh but some of there are some similarities in terms of pricing transparency based on how you want to pay.We offer a multiple different ways to pay either through estimated insurance pricing, if you haven't input your insurance or through through a direct estimated your copay.If your insurance is on file, we have a discount savings program, the prime prescription savings discount program that, that is essentially reflecting a cost plus model for a variety of drugs.And then critically, and I think this is the real differentiation here, Brad for branded medications like insulin products.If there's a manufactured coupon for one of those insulin products that we, we have for this on our, on our website, uh, that were as part of our coupons program, we will automatically apply that to the end cost.That is not something I should emphasize this, that is not something that is commonplace across the industry.People have to go hunting for it 85% of the time that coupon goes unapplied.So if there is a way to save money on medications, whether it's a branded medication or a generic medication, you will find that at Amazon Pharmacy through a very easily navigable website and the store fund experience.Then, uh, finally, we're looking at, you know, the, uh, the entire industry and where it's going PB MS in particular, uh, you know, have a lot of say in this industry and there have been a break up.Some employers are looking at in uh California Blue Shield, for example, partnering with you to provide certain uh certain prescriptions in order to reduce cost.And I think that's the point that patients are looking for is where can costs come down for them.So how do these partnerships uh including the one with Lily Direct that was recently announced and likely other Pharma companies that are coming in line for direct to consumer.You have that avenue with the Amazon network.How does that translate into a better experience but also lower cost for patients?Well, well, angel you just, you said it right there, the the pilot that we announced that's going to go live in 2025 of Blue Cross or Blue Shield of California and some of our uh some other peer stakeholder groups like cost plus.Uh and, and a few other stakeholders, we're really excited about the potential of that because exactly to your point that the journey of the prescription medication is different in that model where it's sourced directly from the manufacturer, where we're able to directly deliver it direct to the patient.And so if there is going to be a mark up in price that historically sometimes might be happening in different ways to acquire a prescription, this is potentially offering a different alternative or you may not see that level of markup and the patient is going to ultimately benefit with a lower cost.So if there's an ability to innovate with traditional stakeholders, and by the way, that pilot includes many traditional stakeholders, we will do that.We've shown a willingness to do that.Lily direct to me is very interesting because that's Lily saying, uh they can choose any pharmacy to partner with.We're one of two to do home delivery and, and, and there's a reason why they did that because they recognized by the way, this is not only just limited to, to Gops and zep band, that's also insulin medications and migraine medications.But what's important to them.They're, they're really concerned about proper prescribing of these medications, making sure the patients that the need these medications on Jane Brad get these medications.And so what do we have beyond a home delivery rapid delivery in places like Seattle and California and New York City or Los Angeles.Rather, we have clinical excellence.We have a team of clinical pharmacists that I work with closely that can answer questions on side effects that are available 2473, 65.So when you couple that with the ability to have home delivery, you, we're truly building the modern pharmacy that the future needs that the patients need right now.But certainly the, the pharmacy of the future, that's why Lily is, is partnering with us bringing responsible prescribing of these critically needed medications to patients that need them the most, Dr Vin Gupta, who is the Amazon Pharmacy chief, medical officer and our own Angelique Kla.Thanks so much for the time and the conversation.