It’s been about 7 months since Amazon’s $753 million acquisition of PillPack closed in September. Since then, new developments have been relatively quiet on the customer-facing front, though Amazon has been applying for more per-fulfillment-facility state licenses. “Right now our focus is on learning from them and innovating with them on how best to meet customer needs over time,” Amazon CFO Brian Olsavsky said in October.
However, today, we’re seeing reports from users for the first time that Amazon is beginning to proactively market PillPack to its broader customer base. Jay Hancock tweets that he’s received (apparently unsolicited) email from Amazon cross-promoting PillPack’s pharmaceutical delivery service.
“Meet PillPack, a new member of the Amazon family,” the email reads. “Your medication sorted by the dose and delivered every month. Our service and shipping are free – you only pay for your medication.” We do not yet know how many people have received this email marketing message, or how Amazon may be targeting early recipients.
Amazon has also added a new PillPack store page on Amazon.com.
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Amazon has said that it has over 100 million Prime customers worldwide, and likely needs to significantly ramp up the number of PillPack fulfillment facilities in operation to better compete with CVS Caremark, Optum, and Express Scripts. Based on this email, it appears that Amazon is beginning to turn on the firehose of potential customers in PillPack’s direction. As Amazon increases its pharmaceutical capacity, and shortens delivery times via the many logistics options available in its Prime Now last mile delivery networks, Amazon should be able to offer rapid delivery for not just medicine but also many types of medical products, from diagnostic tools to medicines and treatments.
Because a core use case for PillPack is better management of chronic conditions, rush delivery may not be as crucial for customers who take multiple medications on an ongoing basis. Thus, PillPack will likely just be a part, but an important part, of a suite of Amazon health care products and services in the coming years.
In addition to prescription medications, Amazon is also taking steps to possibly offer insurance. Amazon has begun the process of applying to sell health and life insurance in India. Just last month, we noted Amazon had obtained its corporate agent license in India. It is also rumored to be exploring the insurance markets in the US, UK, and other countries as well. While Amazon does not offer consumer insurance directly today, it has consumer data that theoretically could help it to assess risk and lower fraud rates.
Date: May 01, 2019
Source: TJI Research
