PLACEBO EFFECT

Americans are hoping Amazon can save them from sky-high drug prices

US drug prices are out of control.
US drug prices are out of control.
Image: Reuters/Jon Nazca
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Americans are eager to buy prescription drugs from Amazon.

More than 70% of US consumers and 85% of Amazon Prime members with health insurance say they would buy their prescriptions on Amazon, according to a survey conducted earlier this year by researchers at Deutsche Bank, who deemed the strength of the results “surprising.” Many of these consumers are hoping the e-commerce giant can save them from sky-high drug prices.

Amazon might not have a lot of experience in health care, but its reputation for high-quality customer service and low prices appeals to US consumers for whom prescription drug costs have spiraled out of control. When Deutsche asked what consumers would look for in an Amazon pharmacy, 55% of Prime members and 79% of people without a Prime subscription chose lower prices (the other options were “1-2 hour delivery” and “availability at local Whole Foods store or other retail store”). Asked what size discount they would look for, 49% of Prime members said 10-20%, and 41% of those without Prime said more than 30%.

Amazon promised to shake up the pharmaceutical industry when it bought prescription-management company PillPack in late June for a reported $1 billion (paywall). PillPack has pharmacy licenses in 49 US states (it currently doesn’t ship to Hawaii), giving Amazon the infrastructure it needs to make a nationwide push into the prescription drug business. Extra jarring to pharmaceutical and health care companies was when Amazon said in January that it had joined JPMorgan and Berkshire Hathaway in a venture to cut health care costs for their more than 1 million employees.

“We believe it is a question of when and where—and not if—Amazon enters the healthcare space more forcefully,” Deutsche researchers wrote in a Sept. 10 report.

Young people showed the most interest in buying prescription drugs on Amazon. But Deutsche’s analysts were surprised to learn that even older people expressed significant interest in the possibility, with more than half of respondents ages 65 and older saying they’d be willing to purchase prescriptions through Amazon.

Optimism that Amazon could lower drug prices might also explain why people without health insurance were most interested of all in purchasing prescriptions through Amazon. Among the uninsured respondents in Deutsche’s survey, 89% of Prime members and 82% of people without Prime said they would buy prescription drugs from Amazon.