21 January 2020

Amazon vs the Pharmacy Guild


For decades GPs have been envious of just how effective and powerful the pharmacy sector was at lobbying Canberra to keep their flock in shape over the years. The key organisation in maintaining revenues and status for pharmacists across the land has been the Pharmacy Guild who managed every 5 years to come up with an pharmacy agreement with the government which somehow maintained pharmacist’s monopoly on who could sell what in what geography under what terms. Even Woolworths and Coles who wanted to offer pharmacy services within their stores, where they no doubt would have been convenient, tried to take the Guild on and eventually were defeated through the Guild’s tight grip on those who matter in Canberra.

Enter Amazon, and finally the Guild may have met a worthy competitor for the future of pharmacy in Australia. The digital platform giant caused some alarm among pharmacists in January by registering the name ‘Amazon Pharmacy’ in Australia  as a trademark.

Amazon is already on a journey of online pharmacy supply in the US having acquired the US based Pillpack, a service that packages medicines into daily doses and sends them online to customers. Pillpack cost them about $1b AUS so it seems likely they’re going to leverage that acquisition locally.

Amazon started supply OTC products in 2018 and have partnered with pharmacy groups to supply prescription products.

Could they do the same thing here? They could easily and more.

As e-prescriptions start to take hold a no shop experience for collecting your prescriptions and OTC products will surely be attractive to most consumers. Some analysts are already predicting that such an initiative might slice as much as 20% from in store revenue for community pharmacies, something that even a group like Chemist Warehouse might find a little hard to swallow.

And those little problems of not being a pharmacist and having dealing with a wholesalers They could easily buy a local wholesaler, Chemist Warehouse or an equivalent if they are really serious.

The Pharmacy Guild so far has been strangely reserved on the matter, initially suggesting to that the ‘in store’ experience would prevail, which is very unlike the Guild. Could they genuinely stumped so far as to what they can do to stop this particular march of the times.