Amazon’s Pharmacy Move Falls Short: Commentary

Amazon’s Pharmacy Move Falls Short, But Validates Need for Same-Day Prescription Delivery (NowRx CEO Comments)

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Q3 2020 hedge fund letters, conferences and more

Amazon's Move Into The Prescription Pharmacy Industry

Amazon today announced its latest move into the estimated $400 billion prescription pharmacy industry with a new offering that it says will allow for two-day delivery of prescription medications. The news is the latest shakeup for traditional pharmacy players and sent drugstore stocks sliding. But not everyone in the industry is worried. In fact some are calling it a great move for consumers and the market.

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Cary Breese is CEO of NowRx, a technology-enabled pharmacy that provides same-day and same-hour delivery of prescription medications.

Breese calls Amazon’s entry into pharmacy, “Great news for consumers who need non-urgent medications and can wait more than two days for their prescription. It clearly moves the industry one step closer to where we believe it is heading: free, same-day delivery for all prescriptions.”  

“Amazon’s entry into pharmacy validates the need for same-day prescription delivery pharmacies like NowRx as it reinforces the move towards consumer convenience, but still falls short of being able to provide free same-day delivery,” he added. “Ultimately, this is what consumers want and have come to expect.”

The Delivery Process

Today Breese tried out Amazon’s new pharmacy. Here’s how the process went for him (seamless but fell short of expectations for two-day delivery upon ordering):

  • After transferring an existing prescription from a retail pharmacy to Amazon Pharmacy, he, as a Prime user, had to create a health profile: including name, DOB, and last 4 of social security.
  • Next that brought up his insurance, and he entered his allergies, the medication name, doctor’s name, and the name of the pharmacy where it was last filled.
  • Once the request was completed, Amazon indicated the transfer is "in process" and that it "will be ready for purchase" by Saturday, 11/21/2020, four days from now. Assuming from this communication, the prescription will not be delivered until two days after 11/21/2020, or 11/23/20, six days from the time it was requested. It seems like it is two-day delivery once they have processed, rather than two days from the time of request (based on Breese’s experience).  Mr. Breese also noted that they are explicitly not handling narcotics, and that if you are not a Prime Member already, a $119 annual fee, then the delivery time is advertised as 4-5 days, unless the customer pays $5.99 for the two-day delivery option.