I am surprised by the market reaction to Amazon Pharmacy... @GoodRx way down on the news for example. Have a bunch of thoughts too disorganized for a blog post but will try to aggregate them all here 1/

What are the main impacts of amazon entering the pharmacy market?
1. new evidence that $AMZN is serious about entering healthcare. not a surprise, they want to take a skim from as much of the economy as possible
2. new value added to the prime subscription

The partnership with $ESRX is interesting - it allows amazon to compete for uninsured patients with goodrx.

BUT, it's not a *strong* competitor for goodrx. Value proposition of the latter is to allow shopping across ALL pbm/pharmacy offers. Amazon will just give one price.

And that makes sense actually - part of power of the prime bundle is that people start their shopping on amazon and don't comparison shop nearly as much. You assume you will get the best deal (net of shipping costs) from amazon.

But I think gdrx customers *are* price sensitive

Amazon is also not nearly the first big retailer to offer a pharmacy. WMT, Target, every big grocery store. PBMs offer mail order pharmacies.

Traditionally in retail, amazon won by having infinite shelf space, traded off against having to wait for shipping...

...But retail pharmacies aren't really constrained by shelf space - there are a limited number of drugs in existence, unlike consumer products

Some drugs aren't conducive to even a 2-day shipping wait. If you need an antibiotic for your kid's ear infection (speaking from experience here!), it is worth driving down to CVS.

Unfortunately for CVS, but good for AMZN, I don't think such drugs are the most valuable SKUs. Instead, you want to be selling the recurring drugs that need to be refilled month after month, when the convenience of having your pills arrive at your door without a thought