Is Amazon developing its next trillion dollar opportunity?
Amazon launched Amazon Pharmacy last week. It's a home-delivery prescription drug delivery programme. Think mail order pharmacy enabled through Amazon. On the one hand, Amazon is going after the online and mail-order prescription drug market. One source estimates the mail-order drug market alone at $49 billion, rising to $166 billion by 2027 (16.5% CAGR).
On the other hand, Amazon is up to something even bigger. I suspect Amazon is developing a multi-faceted value proposition to make it a major player in the healthcare and wellness market which is currently a $1.1 trillion market just in the US. Consider the pieces Amazon has already put together:
- Amazon Care, its health plan, including telemedicine features, for its approximately 1 million employees
- Amazon Pharmacy, powered by PillPack
- Amazon's Alexa Care hub to facilitate remote care of loved ones
- Haven Healthcare, its joint venture with JP Morgan Chase and Berkshire Hathaway
- Amazon Counter which enables attended order pickup at Rite Aid stores
- Its investments in COVID-19 testing
- 126 Prime members
The US healthcare market has been moving toward more consumer-oriented services for several years. Yet, consumer drive healthcare plans (CDHPs) have grown more slowly than many had hoped. Perhaps the company that aspires to be 'the most customer-centric company in the world' can accelerate the change. It is by no means a given that Amazon will succeed given some of the arcane and complex aspects of US healthcare, but they seem to be investing for the long run.
Click here to read Eric Heller's take on Amazon's health and wellness ambitions.