CVS and Walgreens Have New Rival in Pharmacy Business: Amazon. The Stocks Are Falling.
A Walgreens store in Miami, Florida.
Joe Raedle/Getty Images
CVS Health, Walgreens Boots Alliance and Rite Aid have a new rival: Amazon.com.
Shares of the three big pharmacy providers fell Tuesday after e-commerce giant Amazon (ticker: AMZN) unveiled its latest ambition: home delivery of prescription drugs in the U.S., including free, two-day delivery for Prime members. The offering includes a drug savings plan with deep discounts for Prime customers who don’t use insurance.
The move comes two years after Amazon bought PillPack, which delivers pre-sorted daily doses of medications for customers who take multiple drugs a day. That service continues.
“As more and more people look to complete everyday errands from home, pharmacy is an important and needed addition to the Amazon online store,” said Doug Herrington, senior vice president of North American consumer at Amazon.
Shares of CVS (CVS) are down 8% to $67.62 on Tuesday morning, Walgreens (WBA) fell 8.8% to $40.22, and Rite Aid (RAD) is off 15% to $11.02. GoodRx Holdings (GDRX) fell 14% to $40.15.
Amazon shares are up 1.3% to about $3,710.
“We view the launch of Amazon Pharmacy as a clear negative for retail pharmacies,” analysts at SVB Leerink wrote in a note.
Available drugs through the Amazon pharmacy include generic and brand names, but the offering doesn’t deliver certain controlled medications such as most opioids. People enter their insurance information into a profile on the Amazon site, which can tell them whether it’s less expensive to use their insurance or pay through Prime.
For Amazon Prime members, there are discounts up to 80% on generic drugs and 40% on brand names even without insurance. A benefit card allows members to get similar discounts at places like CVS and Rite Aid.
For those who aren’t Prime members, free delivery takes five days, or they can pay $5.99 for faster delivery.
Adults aged 18 and older can begin using the offering this week in 45 states, excepting Hawaii, Illinois, Kentucky, Louisiana, and Minnesota. Customers can transfer their standing prescriptions from existing pharmacies or doctors can call them in directly.
Write to Liz Moyer at [email protected]
