Amazon revealed new feature for Prime members on Tuesday: RxPass, an Amazon Pharmacy benefit that gives access to generic drugs for more than 80 conditions for $5 a month. While it’s being done titles as always when big tech do move in healthcare worldreactions were mixed when it came to actually effecting change on the ground.
Amazon‘c RxPass is only available to Prime members. The $5 per month fee is added to the Prime membership fee, which is $14.99 per month. The 52 drugs offered through RxPass are available without insurance and delivered to members’ homes at no additional cost. It differs from Amazon Pharmacy’s usual offering, which launched in 2020 and serves all users, not just Prime members.
“If you take a closer look at what’s really being offered, it’s clear that RxPass — in its original form — isn’t as innovative as it might initially appear,” said Marissa Moore, health technology investor at OMERS Ventures. “It’s a great first step, but there’s still a lot of work to do.”
The news is creating a lot of buzz for several reasons, Moore said. The generic drugs available are able to treat a wide range of common health conditions. Moreover, they are available at an extremely low price.
“Through traditional retail channels, the majority of these ~50 generic drugs go for more than $5/month – often multiples of that,” Moore said. “Some are several hundred dollars. But according to GoodRx data, the average retail price on the RxPass generic product panel is in the ~$50 range. So on the surface, a flat fee of $5/month – regardless of how many drugs are ordered – is probably very attractive to consumers, especially those who need more than one of these drugs on a regular basis.”
Still, the news misses the mark slightly, Moore added. Not all drugs are “really drugs,” she said. Some are over-the-counter supplements, such as folic acid and biotin. Some are also not needed on a month-to-month basis, such as seasonal allergy medications.
Daniel Grosslight, senior health technology research analyst at Citi, meanwhile, described the launch as a “significant development.” However, he agreed with Moore that the new offering brings value to those who need more than one drug, compared to competitors such as GoodRx and Mark Cuban Cost Plus Drug Company.
“This is a pretty significant development for Amazon and specifically for their pharmacy offering, which hasn’t seen a huge amount of traction … The prices you can get at GoodRx or Cost Plus are usually better than what you can get at Amazon Pharmacy … It’s completely different,” he said in an interview. “It’s a fixed fee for an unlimited supply of generic drugs to treat 80 conditions, over 50 drugs available. If you are polychronic, if you take two or more medications, this will make a lot of sense for you.
In contrast, Moore argues that RxPass does not reach enough users to have a meaningful impact on drug costs. It’s only available in 42 states, except for Texas and California (both of which have some of the the highest drug costs). Additionally, by offering RxPass only to Prime members, it excludes consumers who could benefit the most: older adults.
“Those who can benefit the most from RxPass are those with complex chronic conditions — and they tend to be older,” she said. “Meanwhile, it’s these age groups that are Prime penetration is the lowest. If it can use RxPass to convert more of this demographic into active Prime members, that’s an additional $14.99/member/month in revenue for Amazon ($19.99/member/month including RxPass).“
Dr. Vin Gupta, chief medical officer of Amazon Pharmacy, would likely disagree with Moore’s comments. Gupta said RxPass will expand access to generic drugs.
“Over the past decade as a practicing pulmonologist, I have seen patients with chronic conditions struggle to access the essential medications they need to live their lives well,” Gupta said in an email. “RxPass, a new Prime membership benefit from Amazon Pharmacy, helps address these challenges by providing patients with affordable access to generic drugs that treat more than 80 common health conditions for just $5 a month.”
Gupta added that while RxPass is only available to Prime members, Amazon Pharmacy is still available to all customers.
The news of RxPass coming to market follows the November launch of Amazon Clinic, an outsourced virtual care model that offers treatments for common health conditions including allergies, acne and hair loss. Experts said the Amazon Clinic is likely to be more successful than Amazon Care which turn off at the end of 2022
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