Amazon’s investment into pharmaceuticals can reinvent the healthcare industry

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Since its launch in 1994, Amazon has been conquering industries around the world and mastering the combo low price plus quick delivery. The recent announcement that the e-commerce giant has agreed to acquire the online pharmacy PillPack is just the latest in a series of recent investments and doesn’t come as a big surprise.

For months Amazon has given signs of its interest in expanding into healthcare, including the launch of a joint venture to create a low-cost healthcare company for US workers. onefourzero’s latest report on health tech shows that the demand for online healthcare solutions is increasing drastically – naturally, it was just a matter of time until the company decided to invest in the sector.

But this is not Amazon’s first attempt to climb the healthcare market. In 1999, Bezos bought 46% of and started offering its products on the marketplace, an investment that didn’t prove to be the best option at the time. Selling prescription drugs demands building medical expertise and passing through heavy regulations, special logistical requirements and strong business alliances, something the company wasn’t ready for. The partnership ended in 2005 and officially shut down in 2016.

Acquiring PillPack shows that Amazon is not only ready to give it another try, but also that is has learnt a few lessons. The move will allow the company to enter the US pharmacy market quicker than if it had launched its own from scratch, as regulatory licences and contracts with insurers are included in the deal. Definitely a big step from the over the counter medicines it already offers. While Amazon still hasn’t explained how PillPack will be incorporated to the company or if there are plans for expansion, it would be reasonable to expect that international markets are on the horizon. However, the biggest disruption will come from the valuable data Amazon will be able to collect.

For patients, the option of keeping an online prescription history can help them track their healthcare routine, as well as sharing reviews on results and side effects with the wider community. The data can be used by labs to analyse further reactions not previously detected during clinical trials and identify unsafe drug interactions, helping doctors to improve personalised prescriptions and advice.

On the website, artificial intelligence can analyse each customer’s health and prescription history and personalise recommendations of other products and alternative treatments. An automated direct channel between Amazon and doctors could inform when patients purchase other drugs or different doses than recommended, preventing dangerous combinations or overdose.

In the future, customers could look for online medical advice directly on the website, opening up new opportunities that go beyond products offering. As mentioned on our health tech report, the number of patients searching for prescription services and online doctors has almost doubled since 2014, increasing by 99%. By purchasing PillPack, Amazon ticks the first box – but could it go further and partner with health insurers to incorporate services such as live medical advice, ultimately reshaping the healthcare market worldwide?

Research and development can become less risky if investors can access what patients need through consumer analysis, which offers more information and better trends than traditional medical surveys. With access to millions of customer’s data, Amazon is already ahead of the curve. If medical and pharmaceutical companies want to stay in the game, the time to analyse online performances and develop strong strategies is now.

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