Amazon $AMZN’s pharmacy business may be coming into its own as it expands its physical presence and eyes increased revenue from the new class of weight loss drugs.
After struggling to find its foothold in the U.S. healthcare market since its launch in 2020, in March Amazon announced a partnership with Eli Lilly $LLY to deliver its weight-loss drug Zepbound to consumers, and expanded its same-day pharmacy delivery service to New York City and greater Los Angeles. Amazon Pharmacy vice-president John Love told the Financial Times at the time that Zepbound and its rivals are expected to generate “a lot of revenue.”
To help support those expanded delivery services, on May 29 Amazon Pharmacy opened its first physical location in California, according to the Los Angeles Press-Telegram.
It’s not a normal walk-in store, however. The pharmacy sits next to an Amazon fulfillment center in Corona, California, behind two locked doors, and is meant to facilitate same day deliveries. It’s one of twelve locations nationwide, located in eight states, including New York, Indiana, Texas, and Florida.
Whether Amazon’s self-confidence in its pharmacy business will translate into success remains to be seen, and Amazon doesn’t break out financials for the division. Its efforts to capture a bigger portion of American prescription drug users comes just as rival Walmart $WMT announced in April that it is closing all of its 51 health centers due to a lack of profitability.
The Walmart clinics offered access to specialty pharmacy medication and various health screenings. Walmart still operates 4,600 pharmacies nationwide, however, so it remains a major rival to Amazon in the pharmacy space.