Amazon's $6 for a six-month supply of prescription drugs means investors in retail pharma must be extra-cautious right now

July 15, 2021 | Case Study

When Walmart started its $4 generic drug program, it had an overnight chilling effect on both pharmacy retail companies like CVS and Rite Aid and mom-and-pop pharmacies, which had to drastically slash their pricing to compete. This was possible largely because of the historically high margins on many of the drugs that were affected and the ability to draw consumers who were paying out of pocket due to either a lack of insurance or high prescription drug premiums. Despite the passing of the Affordable Care Act (ACA), many patients remain uninsured and struggle to pay for chronic care medications. Amazon is specifically targeting the same demographic, but with an update that reflects the current retail landscape: digital purchase and delivery.