Potential 'Amazon Pharma' launch asks trust questions of e-commerce titan

Reports that online retail giant Amazon is planning to enter the pharmaceutical market raises questions on how it would build trust among consumers in the space, healthcare PR experts argue.

Potential 'Amazon Pharma' launch asks trust questions of e-commerce titan

Business news network CNBC reported late on Tuesday that Amazon holds an annual meeting to discuss whether to break into the pharma market - and is now "ready to get more serious".

CNBC points out that the firm recently started selling medical equipment in the US, and is hiring for a programme manager focused on healthcare to join its restricted products team in its Seattle HQ.

Andrew Harrison, MD of Hanover's health business, said it was "no surprise that Amazon is eyeing this sector", given two "mega-deals" in the past two-and-a-half years for pharmaceutical wholesale and distribution businesses; namely McKesson buying Celesio for €408m in cash in 2015, and US giant Walgreen's merger with the UK's Alliance Boots in late 2014.

Amazon would have to think carefully about how to position itself in what is a "sensitive" sector for consumers, he said.

"Established pharmacy businesses will doubtless play on their expertise as healthcare companies to maintain customer confidence and market share, and so Amazon would need to consider how to build its reputation in this specialist and sensitive sector – pure logistics capability may not be enough," said Harrison.

"Purchasing certain pharmaceutical products can be a highly sensitive subject for patients," said Paul Tanner, chair of the healthcare PR agency 90Ten. He agreed that Amazon's logistics capability was strong, saying that its Prime service in particular would offer consumers speed, convenience and discretion.

"The greatest challenge for online pharmacies is trust, especially following some recent, high-profile counterfeit medicine campaigns. Amazon is a brand that the general public trusts implicitly and so for that reason they will do very well," he said.

Tanner also said that PR-ing such a brand offers obvious opportunities, commenting: "The media would relish the story of Amazon moving into pharmacy sales. Online Viagra and morning-after pill stories would be very popular."

Clare Preskett, the new co-MD for the UK at Omnicom health agency TogoRun, said the news would give the wider industry food for thought.

She said: "There’s no doubt that offering easier and more convenient ways for patients to access their treatments will benefit them – if Amazon does enter the market, only time will tell the effect on the industry as a whole. The pharmacist often plays a vital role in the care and treatment of patients, so it will be interesting to see if that changes, should Amazon become a key player."

Indeed, an opinion piece on Reuters noted that shares in pharmacy chains including CVS and Walgreens Boots "took a hit" after CNBC's story went live - arguing that low-margin Amazon will see a competitive opportunity in running tigher operating margins than those conventional pharmacy players typically manage.

Read next: Healthcare PR turns up the volume: Incisive Health on getting heard in a way that matters

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