Amazon Offers New Pharmacy Service for Members

On Tuesday, November 17, Amazon announced two new retail pharmacy offerings for its U.S. customers aged 18 or older: a remote retail pharmacy solution that will accept insurance and be in PBM pharmacy networks, and a drug discount program for customers to purchase prescription medications without insurance. Both solutions will allow Amazon customers to order prescription medications for home delivery, with free shipping available for Amazon Prime members.

Two New Pharmacy Services

Acting as a remote retail pharmacy, the Amazon Pharmacy allows customers in 45 states to order up to a 30-day supply of their medication (excluding Hawaii, Illinois, Kentucky, Louisiana, and Minnesota). It accepts most forms of insurance. Prior to purchasing their medications, customers will see the cost of their prescription copay alongside the cash price for the drug, as if they did not have insurance. This level of drug pricing transparency is intended to help consumers understand the true cost of their medications.

Through its Amazon Prime prescription program, Amazon Prime members without insurance can saves money when they pay for their prescriptions. It’s important to note the Amazon Prime prescription program is separate from Amazon Pharmacy. The Amazon Prime prescription program is not insurance and cannot be combined with insurance. In addition, some restrictions apply to Prime members who are enrolled in federal- or state-funded programs, such as Medicare, Medicaid, TRICARE, etc.

These new services expand upon Amazon’s previous emphasis on the pharmaceutical market. In 2018, Amazon acquired PillPack, an online pharmacy which fills prescriptions by mail. The newly announced Amazon Pharmacy is built in part on PillPack’s infrastructure, which includes pharmacy software, fulfillment centers, and existing relationships with health plans.

Impact on Pharmacy Benefits Plans

For employer-sponsored benefit plans, Amazon Pharmacy is another option employees and members have for filling their brand and generic drug prescriptions. It’s drug pricing transparency component will help to increase members’ understanding of the value of their employer-sponsored benefit. However, Amazon Pharmacy’s limitations could be different from what members experience using their prescription drug benefits at other pharmacies.

While a prescriber can write a 90-day script, Amazon Pharmacy will only fill a 30-day medication supply at a time, and there is no auto-refill option. Specialty drugs, compound medications, and Schedule II controlled substances are not available. Additionally, members who enjoy cost-free shipping through their PBM’s mail-order pharmacy may not have free shipping available through Amazon Pharmacy.

Some of these key differences to note include:

  • 90-day prescriptions, such as those for many maintenance medications, will be dispensed as three 30-day prescriptions.
  • No auto-refills are available; users must request a refill via the website or app.
  • Copay cards, coupons, and discount codes are not accepted.
  • Diabetic testing and administration supplies (e.g. test strips, glucose meters, etc.) are not available.
  • Suspensions (e.g. liquid amoxicillin, fluconazole) are not available.
  • Specialty drugs and compound medications are not available.
  • Schedule II controlled medications, which includes most opioid products, are not available.
  • Free shipping is available only to Amazon Prime members; non-Prime members will incur shipping costs (usually $5.99 for two-day delivery).

For employers looking to guide members on the services provided by Amazon Pharmacy, it’s important to inform them of the differences discussed above. Members should consult their pharmacy benefit plan provider’s Customer Service department with any questions before switching their prescriptions to a new pharmacy.

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