Flywheel of innovation triggered by competition

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In the wake of Amazon’s entry into the prescription drug business, competition in the sector is, predictably, beginning to escalate. The company, which aspires to be one of the nation’s leading pharmacy providers, and Walmart, which is already a top-tier provider, earlier this month rolled out initiatives designed to bolster their appeal to patients.

With last November’s launch of the Amazon Pharmacy online store, which enables customers to execute pharmacy transactions and have medications delivered to them, the company staked its long-anticipated claim in the $358.7 billion-a-year prescription drug market. Amazon Prime members receive free two-day delivery, and can realize savings of up to 80% on generic drugs and 40% on branded medications when paying without insurance. They also have the opportunity to realize those savings at 50,000 participating brick-and-mortar pharmacies.

Amazon Pharmacy’s latest innovation is to offer Prime members a six-month supply of commonly prescribed medications used to treat such conditions as hypertension, high cholesterol and diabetes for as little as $1 a month. The program is expected to attract insured consumers with co-pays, as well as individuals without health care coverage.

For its part, Walmart added a prescription savings benefit to its own membership program. Walmart+ enrollees can now obtain selected medications in a variety of therapeutic categories at no charge, and thousands of additional drugs for up to 85% off. Members who present their savings card and a prescription can access the discounts at a Walmart pharmacy or have the information submitted online.

“When you consider the frequency with which many prescriptions are filled, the importance of medication adherence and the ease of multiple fulfilment options, we can make it easier for someone to manage their medical conditions,” says Dr. Cheryl Pegus, Walmart’s executive vice president of health and wellness. “As a company, we’re on a journey to make health care more accessible and affordable.”

By stepping up their efforts to win over pharmacy customers, Walmart and Amazon aim to do more than generate sales. The retailers know that establishing and strengthening connections in a category that has a direct impact on the well-being of consumers and their families results in loyalty that helps drive business beyond the prescription counter. Competing pharmacy operators also understand that dynamic, and they are sure to develop their own ways to connect with patients, sustaining a flywheel of innovation in the sector.



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