Amazon is reportedly pondering an entry into the prescription drug market, according to CNBC.
Over the past year, the e-commerce giant has been hiring talent that could aid in this potential move, and purportedly started working with middle-market pharmacy benefits managers.
The company would likely aim to increase price transparency and lower costs if it entered the market. For example, Amazon may create a mail-order pharmacy that targets people who are uninsured or have high deductibles on their prescriptions, according to a separate report by Leerlink Partners cited by Axios.
The US market for prescription drugs is estimated to be worth $560 billion per year, providing a huge opportunity to Amazon. If Amazon does enter the pharmacy space, it could significantly boost sales, especially if the e-commerce giant succeeds in undercutting competitors on price, as it has many times in the past. Additionally, as the company becomes more of a one-stop shop for US consumers, Amazon's Prime membership is growing more valuable, which means it may eventually boost Prime subscription rates. However, the prescription drug market is heavily regulated, and Amazon would need about two years to obtain the proper licenses in all 50 states.
