When Amazon spent $753 million to buy online pharmacy PillPack, it marked a shift in the e-retailing giant’s healthcare efforts. Like other big tech companies, Amazon has had its eye on healthcare opportunities for some time, but the mail-order pharmacy business seems like an especially good fit.
That being said, it seems that Amazon may have underestimated the degree to which its competitors could slow PillPack’s roll. According to a report from CNBC, traditional retail pharmacy chains like Walgreens and CVS may be resisting PillPack’s efforts to switch patient prescriptions over to its platform.
CVS and Walgreens are the two largest retail pharmacy chains in the U.S., and as a result, many of the patients who switch over to PillPack currently get their meds from one of those two companies. However, the CNBC article says, CVS and Walgreens are rejecting a growing number of PillPack’s transfer requests.
When asked why the transfers were being blocked or delayed, CVS and Walgreens claim that it’s because PillPack isn’t getting appropriate transfer requests from patients. They say that in some cases, patients tell them that they never signed up for PillPack or have never even heard of it.
PillPack, for its part, insists that it always get patient approvals before making transfer requests, asking them explicitly during phone calls whether they are giving the company consent to make the transfer. If the patient agrees, they fill out a personal information form on the web which includes relevant prescriptions and click a button which completes the transfer request.
After patients complete their part of the process, pharmacists with PillPack either call or fax the patient’s existing pharmacy to complete the transfer. Things often break down at this stage, though, Amazon says. It contends that retail chain pharmacists are hanging up on PillPack pharmacists or even throwing request forms in the barrel.
As the battle over transfers has escalated, Amazon has begun to document every instance of when its competitors refuse transfers, a source told CNBC. The two pharmacy chains have also been trying to dissuade patients from switching to PillPack by getting them to sign up for their own rival mail pharmacy services.
In truth, it’s little wonder that CVS and Walgreens are reluctant to cede their business to Amazon without a fight. I doubt this tactic will work over the long haul, however. The real question is whether the brick-and-mortar pharmacy chains can offer a clearly-differentiated alternative to PillPack which keeps existing patients loyal.
Presumably, CVS, Walgreens and other retail pharmacy players will find a way to leverage their face-to-face contact with patients, perhaps by offering new forms of counseling, free health checks that go beyond a rickety blood pressure machine or discounts on OTC medications. After all, they’re certainly not going to beat Amazon at e-retailing.
Meanwhile, PillPack faces another, possibly much uglier, problem in bringing transferred scripts on board. If even a percentage of the transfers call for human involvement, it seems like it will create a serious bottleneck. Going forward, it’s possible that Amazon will need to buy (or build) technology to speed up this end of the process.