Dive Brief:
- Amazon is launching a generic drug discount program for Prime members, beefing up its pharmacy offering as the ecommerce giant continues its push into healthcare.
- The subscription service, called RxPass, is $5 per month for customers with Prime to fill as many prescriptions as needed from a list of about 50 generic medications, including delivery to their doorstep.
- RxPass does not accept insurance, including Medicare and Medicaid coverage. It is available in 42 states.
Dive Insight:
Amazon already sells a number of generic drugs through Amazon Pharmacy. Though costs vary, medications can sell for as low as $1 for a month’s supply. Given that, the extent of RxPass’ role as an inexpensive generic drug pathway is unclear. In a release, Amazon said Prime members who take two or more medications a month could save “significant time and money” with the RxPass subscription.
Annually, RxPass would run consumers $60 on top of the cost of a Prime membership, which is $139 a year in the U.S. However, VP of Amazon Pharmacy John Love told Reuters the average Prime member should save $100 a year with RxPass.
Covered medications address more than 80 chronic conditions, and include drugs like the antibiotic amoxicillin, anti-inflammatory drug naproxen, estrogen steroid hormone estradiol and sildenafil, which is used to treat erectile dysfunction and sold under the brand name Viagra.
In recent years, both healthcare stakeholders and those outside the industry have launched initiatives to manufacture and sell generics to patients.
Mark Cuban, owner of the Dallas Mavericks basketball team and host of TV show Shark Tank, formed the Mark Cuban Cost Plus Drug Company roughly a year ago. The online pharmacy cuts out drug middlemen and sells the medication at cost, plus a 15% markup and pharmacist fee.
In addition, a number of health systems banded together in 2018 to form nonprofit drug company CivicaRx, which began supplying member hospitals with generics one year after its launch. A subsidiary, called CivicaScript, has partnered with payers like Elevance to develop and manufacture common but pricey generics that don’t have enough market competition to drive down cost, and launched its first product in August.
Amazon’s healthcare portfolio has grown to include telehealth, wearable devices, clinical research, nutrition and more. The retail company launched Amazon Pharmacy following its PillPack acquisition in 2018 in an effort to compete with drugstores like CVS and Walgreens amid the rising need for affordable medications.
One in four Americans struggle to afford prescription drugs, and more than a fourth forgo their medications at some point due to cost, according to a Kaiser Family Foundation poll.
Amazon’s efforts to elbow into healthcare haven’t always been successful. The company shut down its hybrid care offering for employers, called Amazon Care, at the end of 2022, after flagging client demand. Another high-profile effort to lower healthcare costs, called Haven, flamed out in 2021 after a few years.
Another key prong of Amazon’s plans in healthcare include its $3.9 billion acquisition of primary care company One Medical announced last summer. The deal is currently under investigation by regulators.
And in November, Amazon announced Amazon Clinic, a virtual marketplace to connect consumers to telemedicine providers who can diagnose, treat and prescribe medication for a range of common health conditions.
