Amazon won't use its pharmacy licenses to sell drugs (for now), records show

Amazon has said it will use its pharmacy licenses in Tennessee and Indiana to sell medical devices and supplies, according to correspondence between the company and state officials, Christina Farr writes for CNBC.

Background

Over the past year, Amazon has received approval from 12 state pharmacy boards to become a wholesale pharmacy distributor, and many of the licenses are linked to three Amazon facilities located in Indianapolis. Amazon acquired licenses in:

  • Alabama;
  • Arizona;
  • Connecticut;
  • Idaho;
  • Louisiana;
  • Michigan;
  • New Hampshire;
  • New Jersey;
  • Nevada;
  • North Dakota;
  • Oregon; and
  • Tennessee.

Amazon also has a wholesale pharmacy license request pending in one more state, Maine.

Not pharmaceuticals, but medical devices and supplies

Using a Freedom of Information Act request, analysts from Jeffries, an investment firm, obtained communications between Amazon and state regulators in Tennessee and Indiana that indicated Amazon was not acquiring these licenses to sell prescription drugs, but rather to sell medical devices and supplies. The application states that Amazon "will not store or ship drugs."

However, despite this news, many industry experts believe Amazon will eventually enter the world of prescription drugs. For instance, Jefferies analysts said Amazon will likely aim for more easily disrupted parts of the health care market—such as the move to sell medical supplies—before entering the prescription drug area. According to CNBC, the organization is expected to decide within the next few weeks whether it will enter the prescription drug industry.

Separately, Adam Fein, president of Pembroke Consulting and an expert on drug supply chains, said while he "would never underestimate Amazon," he "remain[s] somewhat skeptical of Amazon's ability and desire to fundamentally alter the drug channel (as) the incumbents will have many opportunities to defend their position, capture value from internet technologies, and streamline distribution" (Farr, CNBC, 11/13).

Pharmacy leaders: How to strengthen your PBM contracts

Join our experts on Tuesday, Dec. 12 at 1 pm ET to learn about savings opportunities related to better managing pharmacy benefits for employees and other at-risk populations.

Best practices include pharmacist-led formulary optimization, benefit design, managing specialty prescriptions, and strengthening PBM contracts.

Register for the Webconference


Next in the Daily Briefing

Around the nation: AMA awards Medal of Valor to physician who treated patients during Freedom Summer

Read now