Amazon.com Inc. has launched an online pharmacy for selling prescription medicines across the U.S. Shares of drug retailers such as CVS Health Corp (NYSE: CVS) and Walgreens Boots Alliance Inc. (NASDAQ: WBA) fell in the mid-day trading Tuesday following the news.
The new store, named Amazon Pharmacy, will allow customers to compare prices of the medicines on the app. They can choose between their copayment and a non-insurance option while checking out. Amazon will offer heavy discount to its prime members on the store.
The Seattle, Washington-based company has disrupted many industries along its tremendous growth journey. Amazon, which initially started its operations as an online bookseller, has been giving tough competition to companies in the retail and computing industries, and now the leading players in the pharmaceutical market will also face the heat after the latest announcement. The company has also faced criticism from labor groups and regulators in the past over its size and power.
The e-commerce giant’s new venture will now directly compete with Walgreens Boots, CVS Health, Walmart, Rite Aid, Kroger, and others. Online purchase of medicines has been relatively low as compared to physical store purchases. However, the pandemic may drive the online sales of drugs.
In case of Amazon, its prime members maybe more inclined to order drugs online through its newly opened store, as the company is offering up to 80 percent discount on generic and up to 40 percent discount on brand drugs when prime members decide to pay without insurance.
Amazon (NASDAQ: AMZN) shares slightly moved up in the mid-day trading Tuesday. If we look at the performance of the stock in the recent months, the stock has jumped more than 70 percent on year-to-date basis, about +31 percent over the past 6 months, and stayed nearly flat during the past 3 months.
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