Why Amazon’s Move into the Rx Market May Negatively Impact Patient Care

Amazon hit a milestone recently after the price of one share hit US$1,000 for the first time, giving it a total value of close to $500 billion. That makes it the fourth-biggest company in the U.S. in terms of market capitalization and twice the size of brick-and-mortar rival Walmart.

The online retailer’s incredible growth has come from expanding into more and more areas of the economy, providing its customers with speedy delivery of everything from socks and books to lawn chairs and computers. One category it has yet to enter, however, is prescription drugs.

Amazon wants to change that and dispense drugs alongside its hundreds of millions of other wares. Would this be a good thing for consumers and the health care system?

The biggest online retailer’s entry into this market may lead to efficiency gains, but the cost would be dear in terms of further severing the link between patients and actual pharmacists. Research, including my own, shows that patients need more face-to-face time with pharmacists, not less.

Brief history of pharmacies

Pharmacies (or apothecaries, as they were once known) have existed since antiquity. The first retail pharmacy began in Philadelphia in 1729. Back then, pharmacists not only dispensed medications to patients (without a prescription) but diagnosed diseases and handcrafted drugs. In 1951, Congress passed the Federal Food, Drug and Cosmetic Act, which prohibited pharmacists from dispensing FDA-approved drugs without a valid prescription.

Mail-order pharmacies harnessing the raw efficiency of mass-filling prescriptions began to boom in the 1980s. In 2013, about 39 percent of customers said they refilled their prescription by mail order, up from an estimated 6 percent in 1990.

Clearly it costs less per unit of labor for prescriptions to be filled in a centralized facility with industrial pill counting technology and with auto-refills of medication than when prescriptions are filled manually in the store by a local pharmacist triggered by a patient calling the pharmacy.

Consumers say they like the convenience of mail-order pharmacies, which is likely one of the reasons Amazon is getting serious about entering the $450 billion market for prescription drugs.

Amazon might be able to enhance the user experience, as well as make the process even more efficient, but there’s a cost.

Drugs aren’t socks

What is missing from the discussion is that prescription drugs are not socks or refrigerators. When consumers take drugs, they become patients, not just customers.

While prescription drugs hold the promise of preventing disease and treating symptoms, they can maim or even kill if not used correctly.

In 1993, for example, medication-related errors led to about 7,400 deaths, more than double the number of fatalities in 1983, according to a review of death certifications. Unfortunately, they’re the latest data available, but most likely the number is higher today.

A key reason for these errors seems to be a lack of communication. A 2003 report noted that better communication among physicians, pharmacists and nurses could prevent 86 percent of the most serious medication errors, which suggests shifting more drug dispensation to a centralized facility from local pharmacies would worsen the problem.