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Study: Most consumers welcome Amazon’s move into pharmacy

There is good news for Amazon in a research report from Global DataRetail regarding the online giant’s acquisition of online pharmacy PillPack.

Fifty-four percent of Americans approve of Amazon’s decision to enter the pharmacy market — most likely because they think it will increase competition and reduce prices, the data showed. Only 24% think that the move is a bad thing, with the remaining consumers taking a neutral position. Approval is fairly even across the various demographic groups.

However, it will not all be smooth sailing. Consumers have concerns about sharing sensitive medical and health information, which Amazon will need to overcome, according to GlobalData Retail. Insurance network restrictions may also prevent some consumers from using Amazon — even if they want to.

The data also suggests that many consumers like having a physical store where they can get advice or pick up prescriptions. While this could limit Amazon’s growth if it sticks to the PillPack mail order model, it also gives the company an opportunity to develop a physical presence, perhaps using its Whole Foods Markets stores, noted Neil Saunders, managing director, GlobalData Retail.

“In any case, there are sufficient numbers [of consumers] who seem willing and able to use Amazon’s pharmacy services to allow the online giant to build a credible business and cause some disruption to established players,” Saunders said.

Here is a summary of findings from the GlobalData report:

• About 36% of consumers say they would either be very likely or likely to go to Amazon to fulfil their prescription needs. Almost 41% are not sure if they would use Amazon — most likely because it would depend on the networks permitted in their insurance or health plans.

• When it comes to where consumers would like Amazon to offer its pharmacy services, 61% are happy with mail order. But a sizeable number would like to see Amazon develop a physical presence, either at its Whole Food stores or via stand-alone pharmacies. Within ‘somewhere else’, respondents noted Amazon’s bookstores, kiosks in malls and a few mentioned Amazon’s Go convenience concept. These numbers suggest that for Amazon to really penetrate pharmacy, some sort of physical presence is needed, even if not on the scale of the traditional drugstore chains.

• Sharing data could be a barrier for Amazon with almost 58% of consumers saying they’d have at least a minor concern about sharing medical and health information with the company. On the flipside, almost 38% say they would have no problem at all (these consumers tend to be younger).

• Other barriers to using Amazon in pharmacy include a perceived lack of customer service, a desire to visit a physical pharmacy store, potential insurance restrictions, and safety concerns about mail order dispensing.

• When it comes to what Amazon could bring to the pharmacy market, the vast majority of consumers (79%) would like Amazon to lower prices. The ability to pick up prescriptions from Whole Foods stores and have same day delivery were also popular. Just under 60% of consumers would like to be able to reorder drugs via Alexa, and 48% would like a discount for Prime members.
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