Amazon eyes more retail pharmacy share with RxPass launch

Amazon is further entrenching itself in the retail pharmacy market with the launch of RxPass, a new perk in its Prime customer benefits program that offers members a range of generic prescription drugs for a flat monthly fee.

Available through Amazon Pharmacy, RxPass provides more than 50 commonly prescribed generics—treating over 80 health conditions—for $5 per month, with free delivery, Seattle-based Amazon said Tuesday. The e-tail giant noted that the RxPass monthly subscription has “no hidden fees and no markups” and has rolled out to most U.S. states.

Prime members sign up for RxPass by updating their Amazon Pharmacy profile, or setting up an account, via the Amazon mobile app or Amazon.com website. The enrollment process verifies their eligibility and prescription information. Amazon said pharmacists are available 24/7 to answer enrollment and medications questions, as well as help coordinate refills or pharmacy care with a doctor.

RxPass is targeted at pharmacy patients—when not using insurance—who take maintenance medications for chronic diseases or other long-term health conditions. Generics account for nearly nine in 10 dispensed prescriptions.

Prime members who take two or more prescriptions per month could save “significant time and money” with the $5 RxPass add-on subscription, Amazon said. / Photo courtesy of Amazon

Amazon cited research last fall from the Kaiser Family Foundation, which found that of the 62% of U.S. adults taking prescription drugs, 47% take more than one medication, with 11% taking two, 11% taking three and 25% taking four or more. The Kaiser survey also revealed that more than three in 10 patients haven’t taken their medicine as prescribed, including by not filling a prescription (18%) or cutting pills in half/skipping doses (15%). Eighty-three percent of those polled see prescription drug costs as “unreasonable,” yet 69% reported that affording them is easy.

Amazon said Prime members who take two or more generics per month could save “significant time and money” with the $5 RxPass add-on subscription plus benefit from added convenience, since the flat monthly fee means no deductibles or co-payments. Participants can cancel the RxPass service at any time if their prescription drug needs change, the company added.

“Prime members already get fast, free delivery on prescription medications, and RxPass is one more way to save with Amazon Pharmacy,” John Love, vice president of Amazon Pharmacy, said in a statement. “Any customer who pays more than $10 a month for their eligible medications will see their prescription costs drop by 50% or more, plus they save time by skipping a trip to the pharmacy. We are excited to offer our customers surprisingly simple, low pricing on the eligible medications they need each month.”

RxPass comes at a time when U.S. consumers already are sensitive to elevated grocer pricing and raises Amazon’s profile as an affordable and convenient pharmacy destination. Prime also includes a prescription savings benefit, at no additional fee, providing discounts of up to 80% off generic and 40% off branded medications at more than 60,000 participating pharmacies nationwide, including Amazon Pharmacy and the PillPack by Amazon Pharmacy service. In addition, Prime members get free two-day delivery.

Amazon’s online pharmacy service encompasses Amazon Pharmacy, launched in November 2020, and PillPack by Amazon Pharmacy, which provides pre-sorted dose packaging for people on multiple daily medications. The latter came from Amazon’s acquisition of online pharmacy PillPack in mid-2018, which at the time seemed to confirm behind-the-scenes moves that the e-tailer was planning a pharmacy operation.

In 2006, rival Walmart shook up the retail pharmacy market—then led by Walgreens, CVS and Rite Aid—with its launch of $4 generic prescriptions, which became an immediate hit with consumers. The program now includes hundreds of commonly prescribed generic drugs at $4 for a 30-day supply and $10 for a 90-day supply. Walmart ostensibly could add prescription drug savings or delivery perks to its burgeoning Walmart membership program, which launched in September 2020 and has steadily expanded benefits.

Besides Walmart and the big-three drug chains, Amazon also competes in the pharmacy marketplace with leading supermarket and mass-merchant pharmacies—such as Costco, The Kroger Co., Albertsons Cos., Publix, Ahold Delhaize USA and H-E-B—and with pharmacy benefit management (PBM) and mail pharmacy services, including CVS Caremark/Aetna, Cigna/Express Scripts, UnitedHealth Group/OptumRx and Humana Pharmacy Solutions.