A Look at Amazon’s Many Ventures Into Medicine — Part 1

November 18, 2020 - 8 minutes read

medical app developerAmazon is an international tech juggernaut with large investments in many industries like cloud computing, logistics, and, of course, e-commerce. The Seattle-headquartered company is responsible for one-fifth of America’s gross domestic product, and its medical products line is expanding quickly, too. Is Amazon on the cusp of transforming the American healthcare system and how patients receive care?

In this special series of posts about Amazon’s healthcare and medical products, we’ll cover a variety of the largest healthcare acquisitions the company has made in the past decade. We’ll also look at how far these products have forayed into the actual medical system. In this first post, we’ll discuss the success and shortcomings of PillPack and Amazon Care.

Amazon’s Healthcare Vision

Amazon hasn’t shared its healthcare goals, vision, and strategy publicly. But we’ve got an idea of where the company is headed by following its acquisitions, earning reports, and press releases. According to Bryan Niehaus, a vice president at healthcare consulting firm Advis, Amazon is making it known that it’s very familiar with the American healthcare industry and new tech advancements in medicine and healthcare. But Amazon is being selective with what types of companies they acquire and follow: “they’re picking their spots on where to get involved,” says Niehaus.

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While some products are an extension of their current business model, some products are more disruptive medical applications that utilize emerging technologies like AI (artificial intelligence) and IoT (the Internet of Things). Some products have found their niche quickly, while others are struggling to find their target audience. But because all of the products have the multi-billion-dollar backing of their parent company, there’s still a chance for major success and integration into the world’s largest healthcare industry.

Amazon’s PillPack

According to Nathan Ray, a director of healthcare mergers and acquisitions at consulting firm West Monroe, Amazon isn’t the first company people think of when they’re asked about innovators in healthcare acquisitions and mergers. But that’s not the case with PillPack. PillPack was originally a startup, but Amazon acquired it in 2018 as it was growing from being a small company to a large, national enterprise.

In 2018, PillPack already had strong relationships with local brick-and-mortar pharmacies, and the company had fortified the mail-order pharmacy operations that allowed them to dispense medications in all 50 states. The promising company had a growing and proven business model, and Amazon was particularly interested in the expertise that the company had acquired through years of regulatory filings and legal meetings. PillPack had gained the appropriate licensing to practice in all 50 states and had built up their infrastructure to maintain mail-order services and supply retail pharmacies.

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Amazon saw PillPack as a perfectly-positioned opportunity to connect their existing (massive) customer base with digital healthcare. These customers had shown Amazon, through their repetitive purchases online, a strong interest in getting medications delivered as well. PillPack had the potential to be the portal to Amazon’s product delivery expansion goals.

Using PillPack More Strategically

Niehaus has some ideas to use PillPack’s strengths in other ways for Amazon customers. For example, partnering with a well-established electronic health record system to create a sign-in space could help customers unite their prescriptions, medical supplies, medical devices, and provider messages in one easy-to-manage location. Another idea for PillPack is to offer telehealth services. This is a perfect fit for the digital shoppers of Amazon to streamline and merge more broken-out parts of the healthcare system.

Blue Cross Blue Shield (BCBS) of Massachusetts recently announced their partnership with PillPack. The insurance company is offering pharmacy services to its members, including free home delivery of their medications. BCBS said it was the first health insurance provider to offer direct integration with PillPack.

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Amazon doesn’t offer all of its own employees telehealth services. But it should: the company is already providing infrastructure and up-time support to a large portion of the telehealth services that launched during the pandemic with Amazon Web Services (AWS). Anything that has to do with digital healthcare can be successfully managed on AWS servers. Ray says that Amazon’s ability to consolidate telehealth with data collection and analysis from wearables and remote monitoring devices could create the most change in our healthcare system.

Amazon Care

Amazon Care is a virtual healthcare program started by Amazon in September of 2019 that offers telehealth care and face-to-face follow-up appointments to a number of Seattle-based employees. The employee must reside in one of 105 pre-designated zip codes and have an Amazon-sponsored healthcare plan; employees with Kaiser Permanente plans aren’t eligible for the Amazon Care program. According to Ray, Amazon Care is a product of great interest to healthcare experts because Amazon is using its employees to experiment with a new healthcare model.

Vin Gupta, a pulmonologist and public health expert, was appointed principal scientist of Amazon Care in January. In February, Amazon Care expanded to include healthcare coverage to dependents of the employees already using Amazon Care. Ray says that Amazon has the means to innovate healthcare while saving money and providing a new type of healthcare to its employees. With Amazon Care, the company can remove barriers to access and offer better care and hours of operation.

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No one is sure how Amazon Care is going to fare over the next decade, but Amazon shouldn’t miss the opportunity to provide top-of-the-line care to its national network of warehouse employees. It would set the precedent for other large companies to provide in-house healthcare with better quality at a fraction of the cost to both the employer and employee. And if other companies don’t want to expand into having in-house healthcare, they can always offer their employees a plan under Amazon Care.

Amazon’s Road Ahead

Amazon is unlike any other company on Earth; it has the scale and ability to change almost any industry for the better, and healthcare is one industry in need of a major revamp. Stay tuned for our next post, where we’ll discuss Amazon Haven, Comprehend Medical, Alexa, and data and security considerations.

Would you be comfortable signing up for a healthcare plan under Amazon Care if it was cheaper and gave better access than your current plan? Let us know in the comments below!

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