Rumors are flying that Amazon.com has been hiring pharmaceutical experts and plans to expand its operations into the prescription drug business. While the company hasn’t done anything to confirm or deny these rumors, it would be a logical move for a business that aims to deliver everything from food to electronics directly to your front door. So, what would be the implications of a world where Amazon.com steps up as a health care provider?
In many ways, health care is the final frontier of ecommerce. While it’s possible to purchase practically anything online, there are still barriers that force patients to physically seek out doctors and pharmacists in order to obtain medicine. Advances in communications have made telemedicine — the practice of consulting a doctor remotely — a viable and affordable option for many, but state laws still prevent the practice from becoming widespread across the entire nation.
At the same time, the restrictive, insurance-based policies included in Obamacare have made actually accessing a doctor in person more difficult, while simultaneously increasing the cost of all forms of medical care. In the current climate, it has become more important than ever for patients to find ways to take more control of their health into their own hands and bypass the government system that doesn’t serve their needs.
Home-delivered pharmaceuticals through a web portal like Amazon might be one of the tools that helps set patients free from the grinding bureaucracy of the health care system. Of course, no one is suggesting doing away with the prescription system, and a qualified doctor would still need to approve purchases of prescription drugs, but Amazon could provide a more efficient and, more importantly, cheaper option for those in need of medical help.
A report from Goldman-Sachs suggests that Amazon could take the place of pharmacy benefit managers, the third-party overseers of prescription drug plans through some insurance companies, as well as Medicare Part D, and provide more price transparency for consumers, which in turn encourages pharmaceutical companies to compete for business by lowering prices. As things stand, patients rarely find out the cost of their prescriptions until they are actually paying for them. Another price benefit could come from Amazon’s vast scale of operation and existing infrastructure for deliveries, something that is absent from traditional pharmacies. With economies of scale and low overhead, Amazon would be expected to charge less than your local CVS or Walgreens ever could.
There are those who fear Jeff Bezos’ ever-expanding empire, viewing the billionaire entrepreneur as some sort of maniac bent on world domination. How long, they wonder, until we are all forced to bow down and serve our masters at Amazon? Such paranoia is natural, I suppose, but it neglects the fact that Amazon is only successful because it provides people with goods and services they want to buy. If the company is able to successfully take pharmaceuticals under its umbrella, it will be because doing so benefits consumers by providing medicine at lower costs and faster speeds, as well as including a home delivery option absent from most pharmacies. If the company fails to accomplish those things, it will find customers hard to come by.
The history of health care in America is largely one of government holding back innovation and throwing barriers in the way of those who want to do things differently. As technologies advance by leaps and bounds in, say, the smartphone market, health care has notably lagged behind. Getting a consumer-friendly giant like Amazon involved in the process could jump-start a new wave of competition and innovation that would benefit patients all over the country. And once that process starts, there’s no telling where it will end. It’s unclear whether Amazon is prepared to actually tackle the legal and regulatory barriers to jumping into the health care market, but if it does, it’s likely to be a literal lifesaver for many people.
Logan Albright is a researcher for Conservative Review and director of research for Free the People. You can follow him on Twitter @loganalbright73.
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