The Disruption Of The Pharmaceutical Industry Has Begun

Retail giant Amazon has been claiming gradual space in the tech industry for the best part of 20 years, but even by its own gargantuan standards, the company has had a fascinating 2017. It purchased grocery chain Whole Foods for nearly $14 billion, a strong hint at its brick-and-mortar future. It broke through Hollywood, releasing films and television shows that swept major awards, and founder and CEO Jeff Bezos even briefly unseated Bill Gates as the richest person in the world, dropping to second, then climbing to first place again.

From A to Z

Such benchmarks in a company’s history make it difficult to predict what’s next. Much of its success comes less from speculation than just readily unstoppable ambition. No one but Bezos could say what’s next for Amazon, and even then the company’s future might be too unpredictable even for him to fully comprehend. Yet a report earlier this year hinted at an entirely new venture, linked to the company’s much discussed Whole Foods acquisition: prescription medicine.
When Amazon announced that it was considering a potential entry into the pharmaceutical industry, it sent many into a tizzy, momentarily plummeting the stock of industry middlemen like Walmart, Target and Kroger. As a company known for their transformative approach to traditional marketplaces, the new venture rightfully worried many whose bread and butter were in the everyday facilitation of this industry. The concern centers around a kind of advantage that only online retailers have, namely the accrued data of their customers. A patient who shows signs of depression or mood imbalance could find their Amazon recommendations suddenly leaning towards self-help books or anti-anxiety products.

Uncharted Territory

The move is sure to face its fair share of difficulties. Though the company has built a proper reputation for transforming and dominating long-standing industries, it has nevertheless hit walls in highly-regulated markets such as alcohol distribution. The health industry is a similarly complex undertaking. Drug businesses are known for being far-from transparent, and the backwards nature of US drug pricing is complex at best, defective at worst.  
Still, the news comes hot in the heels of an unprecedented industry shake-up. Earlier this week, drugstore giant CVS announced plans to purchase one of the biggest health insurers in the United States, Aetna, for $65 billion, a deal that has the potential to radically reshape the American health industry. Plans have been vaguely outlined to potentially transform conventional pharmacies into one-stop shops, providing medical assistance and appointments for patients who carry the company’s insurance.
This blurring of retail and health provider could serve as a kind of blueprint for how Amazon would go about transforming their grocery chains into pharmacy hybrids. The company already sells over-the-counter products like Aspirin and contact solution, and in October it won approval from 12 states to become a wholesale drug provider. These developments come as a surprise for the public at large, but begin their gradual immersion into everyday life almost instantaneously.

New Possibilities

In many ways, tech and health retailers are a brilliant microcosm for the ways in which change comes as both a trickle and a wave. Amazon had mentioned a possible entry into the grocery industry well before acquiring Whole Foods, with rumblings lasting for more than a decade. As a result, even with Whole Foods providing a convenient brick-and-mortar option, there is no guarantee that Amazon will be acting on their plans anytime soon.
Yet the giant has also gone full steam ahead on their Amazon Go project, a series of physical stores that allow customers to walk in, pick up and walk out, with their Amazon Prime account automatically charged once they walk off the premises. That notion felt like a pipedream a mere three years ago, but the success of their Seattle locations have some saying that the plan could become a country-wide reality sooner than we think. Maybe the company’s foray into medicine will prove similarly fast tracked. If so, expect many other tech companies to do as they always do: move with one eye on Bezos.