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Amazon continues entry into e-pharmacy market

BANGALORE INDIA June 13, 2019 : Amazon in printed on cardboard in India. Image credit: Lakshmiprasad Sindhnur / 123rf
Image credit: Lakshmiprasad Sindhnur / 123rf

Tuesday saw tech giant Amazon consolidate its entry into the e-pharmacy market, a major driver of the digital healthcare sector.

Regarded as one of the most powerful technology companies in the world, the move by Amazon in the United States was described by the Associated Press as “shaking up another industry.” As of Tuesday, consumers became able to avail “commonly prescribed medications Tuesday, including creams, pills, as well as medications that need to stay refrigerated, like insulin. 

“Shoppers have to set up a profile on Amazon’s website and have their doctors send prescriptions there. Most insurance is accepted, Amazon said. But Prime members who don’t have insurance can also buy generic or brand name drugs from Amazon for a discount.”

This is not the first overture Amazon has made in the e-pharmacy market, as India well knows. In August, the company announced it would debut an Amazon Pharmacy in Karnataka state capital Bengaluru with the potential to trial the initiative in other Indian cities. Amazon has invested heavily in India, with its founder and chief executive officer (CEO) Jeff Bezos announcing in January a US$1 billion investment in the world’s second-most populous nation.

Amazon’s overtures towards India have not been without controversy. When Bezos visited India earlier this year, he did not receive the warmest of receptions. Small traders who view Amazon as a threat to their livelihoods protested the visit. The world’s wealthiest man even received a cool reception from the Government. 

The company’s entry into the e-pharmacy market – one which has witnessed many legal difficulties in recent years – has also received criticism. The All India Organisation of Chemists and Druggists (AIOCD) highlighted this. In August, the AIOCD wrote to Bezos and Amazon’s Indian CEO following the August announcement. They said the e-pharmacy market “has been marred by extreme controversies, court cases, and legal issues in [the] last few years.” They added “entering this space can bring on legal implications which can bring disrepute to Amazon’s name.” 

However, e-pharmacies are expected to generate substantial revenue in the next few years. Lingering concerns notwithstanding, the e-pharmacy market may be a US$3.7 billion industry by 2022 – a sevenfold growth compared to last year. Online pharmacies are expected to be a major driver of the e-health sector, projected to reach US$16 billion in value in the next five years. Yet the controversies are unlikely to dissipate – and so while the move by Amazon may be savvy, smooth sailing is far from probable. 

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