The Latest Worst Kept Secret: Amazon’s Move into Pharmacy

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“I think Amazon getting into the PBM business (pharmacy benefits management) is a bunch of B.S.,” said Vishnu Lekraj, an analyst with analyst firm Morningstar. “I don’t understand how a company that can ship goods to a consumer can take over every single industry.”

According to state pharmaceutical boards, Amazon has received approval for wholesale pharmacy licenses in at least 12 states: Arizona, North Dakota, Nevada, Alabama, New Jersey, Michigan, Louisiana, Connecticut, Idaho, New Hampshire, Tennessee and Oregon, with applications pending in other states. In fact, some of the license types go beyond prescription drugs and include approvals for products and devices that fall under the durable medical products category, such as oxygen and other medical gasses.

With respect to the requisite interstate distribution approvals, they’re on file, too, complete with tie-backs to named Amazon distribution centers. Finally, go ahead and check out the LinkedIn accounts of several new Amazon executive hires and you’ll see backgrounds from PBMs and other significant healthcare products companies.

Despite all of this, many analysts remain circumspect about the company’s plans. While you wouldn’t expect Amazon spokespeople to make it easy by fueling speculation and commenting on rumors, how much more obvious could this be? Must Amazon publish its business plan before we become believers?

Could this be the worst kept secret since Harvey Weinstein’s shenanigans finally went “public”?

When it comes to the art of connecting dots, Steve Jobs is famously quoted, “Again, you can't connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.”

Although the details of Amazon’s plans to disrupt the pharmacy benefits management and medical home products businesses will never be published, I have no doubt that it has already made it intentions abundantly clear. I just wish Amazon would hurry up about it. It’s not the anticipation that’s killing me; it is having to tolerate continued dealings with the companies they will replace.

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