Good advice from Jeff Bezons: take two aspirin

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pricing-of-prescription-drugs.jpgYou could look it up, the old-fashioned way, in the hardcover PDR (the Physician's Desk Reference, $97.95 for the 2017 edition) or the Merck Manual ($62.49 for the 3,754-page 19th edition), or you could do a search on your kindle for acetylsalicylic acid, generically known as aspirin. The compound was synthesized from willow bark in 1890s by scientists at Bayer, in northern Germany, and is used to treat headaches and fevers. Not protected by patents or trademarks in most countries, aspirin is one of the most widely used medicines in the world.

Can you see where this is going? Jeff Bezos can.

We know that Bezos, the CEO of Amazon, understands that the company needs to get into several new markets in order to keep growing. Books were the foundation, sure, followed by appliances, and furnishings, among many other categories. The biggest prizes would be the places Americans spend the most money, food and clothing.

Amazon Fresh is the company's growing business in the food sector, carefully watching the efforts of the big grocery chains and online companies like FreshDirect and Pangea.

Amazon Fashion is still evolving, and is building on the success of competitors like Zappos, Lulu and Zulilly.

Comes now a third category of American household expenditures: pharmaceuticals. Over-the-counter health care is already a major department, covering everything from vitamins to razor blades.

The pharmacy market could be worth billions and is a mouthwatering target.

According to a report on CNBC, US consumers order more than 4 billion prescriptions every year worth $300 billion. A significant percentage of that amount was covered by insurance companies, but the landscape is changing.

The uncertainty over the future of medical insurance, led by the so-far unsuccessful Republican attempt to repeal the Affordable Care Act, has the effect of getting Americans to look more closely at their co-pays and at prescription drug prices.

Discount drugs have long been available by mail, but there's always the issue of trusting the supplier to ship "the real thing." Amazon, founded a quarter century ago, has been established long enough to set buyers' minds at rest when it comes to reliability.

The field is already crowded, dominated by Good Rx, Express Scripts, and the CVS chain's CVS Health. But less costly health insurance policies, typically with higher deductibles, may push more consumers toward online prescriptions, a market that could be worth $50 to $100 billion.

As we said, Bezos has been on this mountaintop before. Some 20 years ago, he was a board member of an outfit called It was bought out by Walgreen's and promptly shut down.

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This page contains a single entry by Cornichon published on May 17, 2017 11:00 AM.

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