The online retail
giant moved into the roughly $800 billion U.S. grocery market in June
by buying Whole Foods Market Inc. Drugs, a $450 billion industry in the U.S.,
are likewise most often sold from brick-and-mortar stores. Shoppers filling
prescriptions frequently pick up toiletries, beauty supplies and dish
soap—all retail items Amazon already sells. And the distribution chain for
drugs has lots of middlemen whose markups Amazon can seek to undercut.
No wonder shares of drugstore
chains CVS Health Corp. and Walgreens Boots Alliance Inc. have dropped sharply
since analyst speculation about Amazon entering the pharmacy business
intensified last month. On Monday, CVS Health said it would begin same-day
delivery in several cities in early 2018, an apparent defensive
move. Amazon has never commented on its pharmacy ambitions.
Drugs, which are light and
don’t require in-person selection, “are a perfect match” for Amazon, said SSR
Health analyst Richard Evans in a recent report.
Here are six ways the
retailer could overturn the American pharmacy market.