Tech

Amazon is on the brink of deciding if it will make a big move into selling drugs online

Key Points
  • Amazon's push into pharmacy is very much an "if" and not a "when," sources say.
  • The company spends years researching opportunities before it telegraphs its intentions.
  • The drug supply chain is particularly complex, with regulatory hurdles and entrenched competition.
Amazon is on the brink of deciding if it will make a big move into selling drugs online
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Amazon is on the brink of deciding if it will make a big move into selling drugs online

is in the final stages of figuring out its strategy to get into the multibillion-dollar prescription drug market.

The company will decide before Thanksgiving whether to move into selling prescription drugs online, according to an email from Amazon viewed by CNBC and a source familiar with the situation. If it decides to make that move, it will start expanding its senior team with drug supply chain experts.

Amazon typically spends years researching opportunities before it telegraphs its intentions. The opportunity to sell drugs online is alluring given its market size -- analysts have estimated the U.S. prescription drug market at $560 billion per year. Amazon is well aware of the complexities, say sources familiar with the company's thinking.

Amazon declined to comment.

In the past year, Amazon has ramped up its hiring and consulted with dozens of people about a potential move into the pharmacy market. The consumables team, which includes groceries, kicked off the research, with the division's vice president, Eric French, taking the lead.

It brought on Mark Lyons from Premera Blue Cross to build an internal pharmacy benefits manager for its own employees, say multiple people familiar. According to one of the people, it's possible that the push into the broader drug supply chain hinges on its success with this effort.

In May, the company kicked off its search for a general manager to lead its pharmacy push, externally dubbed "healthcare."

Analyst firm Leerink has separately reported that Amazon will get into the pharmacy management space and expects an announcement within the next year or two.

Goldman Sachs published a report on the topic in August of this year, speculating that Amazon will ultimately look to improve price transparency for consumers and reduce out-of-pocket costs.

Amazon already has a business selling medical supplies online, such as gauze and thermometers. It also has a health team called 1492, which is focused on both hardware and software projects, like developing health applications for the Echo and Dash Wand. Its cloud service, Amazon Web Services, continues to dominate the health and life sciences market.

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