What Amazon Can Really Deliver

Dec 4, 2017

The healthcare news has been abuzz with reports that Amazon, the company that upended the retail, publishing, movies, groceries, and countless other industries is now taking on the drug distribution channel. Think of the companies that Amazon has disrupted out of business (remember Borders? Blockbuster? Record stores?). Could drug stores and even PBMs?

At Abarca, we think that if Amazon becomes the next drug mail order and pharmacy services company, and if they bring the smarts they showed in other lines of business, consumers will stand to gain tremendously.

Prices could fall and pharmacy benefits could be more transparent for members. There could be fewer middlemen between the manufacturer and the patient taking a cut. Great. But we believe the biggest gains could be in the member experience. In fact, the change in the way Americans buy prescriptions could be so profound, it could improve health and healthcare in ways that are hard to imagine.

Amazon redefined home delivery and we love it. Families today rely on Amazon mail order so much that, in a growing economy, the brick and mortar retail employment is actually shrinking. Home delivery has never taken hold for prescriptions in this way. For the relatively few people who get their scripts by mail, home delivery is something that their plans require, and not something they choose to do.

But efficient home and same-day delivery on Amazon’s scale could make getting prescriptions faster, cheaper and easier for consumers. Think of what this could mean to people in rural areas, the home bound and the elderly. This could drive medication adherence up dramatically, something the public health community has wrestled with for decades.

Could Amazon be having an impact on the pharmacy marketplace even before it enters it? CVS just announced same day home delivery in some big cities. This and the company’s decision to acquire Aetna are more than likely spurred, at least in part, by the Amazon threat. CVS isn’t the only one rethinking business models and girding for battle with potentially the biggest pharmacy competitor ever.

At Abarca, we believe that improving the member experience is everything, and we have been quietly disrupting the industry to do just that. For example, we have been working with manufacturers to provide members and payers with money back guarantees if medications have side effects or don’t work as intended. We’re rethinking member engagement by partnering with the pharmacists who know them and connecting with consumers in ways that are far less frustrating and more effective. Approaches like these have enabled us to help one Medicare plan jump from 2 stars to 5 in just 2 years, and deliver the lowest PMPM drug costs to the most underfunded Medicaid plan in the nation. We have ambitious plans, but we know that we are just scratching the surface.

We are committed to a smarter platform, higher standard and better experience for payers, providers and plans, and we agree that the drug dispensing experience is in need of serious disruption. The key to getting people fully engaged in their healthcare is to make it simple and affordable. When this happens, adherence goes up, people manage their chronic diseases better, and the skyrocketing cost of our nation’s healthcare system will begin to slow.

If Amazon can deliver that and help us change healthcare, sign us up for Prime


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