Amazon is slowly but surely ratcheting up its healthcare business, but the world’s biggest online retailer is still dropping only broad hints to Wall Street analysts on its true plans for healthcare ecommerce.
Amazon closed its $753 million deal for PillPack, which manages multiple prescription medications for customers by pre-sorting, packaging and delivering the drugs—all with a 24/7 pharmacy staff that customers can contact either online or via phone—last September.
Last week social media channels and the healthcare trade press gave lots of attention to the fact that PillPack is now an Amazon company and a service that might soon be available through Amazon Business Prime and Amazon Prime, its two-day free shipping program that now has more than 100 million members, according to new estimates from Consumer Intelligence Research Partners (CIRP).
In flyers included in Amazon Prime orders and in emails, Amazon created marketing messages that made members aware that PillPack is “ now part of the Amazon family” and “your medication sorted by the dose and delivered every month—our service and shipping are free and you pay only for your medication.”
The implication from social media messages was that PillPack may be part of a new plan to evolve Amazon Prime into a one-day shipping program. Amazon has a big plan to further cement its status as an ecommerce leader: transform Prime into a one-day free shipping offer, said Brian Olsavsky, Amazon’s chief financial officer, in a conference call with analysts.
“We’ve already started down this path,” he said, noting that the retailer is investing $800 million in the effort. “In the past months we’ve significantly expanded our one-day eligible selection and also expanded the number of ZIP codes eligible for one-day shipping.”
Details are still forthcoming, but on the earnings call Amazon executives hinted that PillPack may be included in plans for Amazon Business and faster delivery via Amazon Business Prime. Amazon launched Business Prime in October 2017 with two-day shipping at no extra charge above its annual subscription fees. Last fall, it added such features as one-day and same-day shipping and spend management and pay-by-invoice tools.
“Of course, we’ve talked in the past about how Amazon Business serves many other companies, including the healthcare industry and providing them some great selection,” says Amazon director of investor relations David Fildes. “And fast delivery is part of that—the business program there and that continues to do well and it’s a focus of Amazon Business amongst other verticals there that they serve.”
Amazon also hinted that PillPack will be more involved in forthcoming Amazon Prime plans. “PillPack, we’re probably around 6 months or so in since that acquisition closed and continuing to support them in their mission and learn from them certainly,” Fildes says. “So, no real update on that, but excited about the potential there to be sure.”