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Shares of drugstore chains tumble as Amazon launches its onl...
26-11-2020 09:20
Shares of drugstore chains tumble as Amazon launches its online pharmacy
Shares of drugstore chains tumble as Amazon launches its online pharmacy

On Tuesday, November 17, e-commerce giant Amazon announced the start of its online pharmacy, Bloomberg reports. The launch of Amazon Pharmacy caused a plunge in the shares of the US largest drugstore chains, CVS Health and Walgreens Boots Alliance. Amazon Pharmacy is available online on the company’s website and mobile app. It allows customers to purchase prescription and over-the-counter medications using various payment methods, including health insurance.  The project came to life 2.5 years after Amazon had purchased online drug startup PillPack. This move helped Amazon gain a foothold in the market of traditional drug retailers. However, experts think that Amazon’s arrival in the pharma market does not necessarily mean it will dominate the industry. The company strives to meet customers’ needs by offering a wide choice of medications. This was a widely anticipated step as analysts expected Amazon to use its digital and logistics capabilities in the healthcare sector. Customers can now order prescription drugs online directly from Amazon where they can compare prices with and without insurance. This should help increase price transparency and may even change the supply chain in the future. Thanks to the new online pharmacy, the e-commerce leader can now successfully compete with Walmart and other large drugstores that sell prescription medicine.  Notably, the shares of CVS Health and Walgreens Boots slipped by 7.8% and 10.1% respectively following the news about Amazon's new offering.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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