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Amazon could probably upend drugstores, too


If Amazon is thinking of going after the broader pharmacy benefit management (PBM) business—and that's a possibility, given it reportedly hired someone to create an internal PBM—then it's looking at a sector that brought in more than $200 billion in revenue last year.


And American drugstores—as Europeans are fond of reminding you every single time you ask them where you can buy a hair elastic or a can of soda—do sell a wide variety of convenience items.


And while there is already a lot of activity in the mail-order pharmacy space, Amazon has a couple of competitive advantages there: free guaranteed two-day shipping if you have Prime, and the ability to pick up a pair of socks and a television set while you're getting your blood pressure meds.


So I don't find it plausible that these barriers to entry are high enough to keep Amazon from causing CVS and Walgreens a whole lot of pain.


That's not just for the sheer joy of putting competitors into the grave; it's also because broader reach increases Amazon's market power—and its benefit to its customers.




READ MORE (Crain's Chicago Business)


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This post first appeared on The 5th News, please read the originial post: here

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