Specialist
Former Director at PillPack LLC
Agenda
- Overview of the D2C pharmacy market
- Impact of regulation and litigation on Amazon’s (NASDAQ: AMZN) entry in the market
- Examining dynamics between PillPack and established PBMs (pharmacy benefit managers)
- Comparative strategies of the major players in the sector
- Outlook for 2019 and beyond
Questions
1.
What are the key trends in the pharmacy sector? Is there an industry-wide effort to move towards the DTC
model?
2.
What is Amazon trying to achieve with the purchase of PillPack last year?
3.
Who are PillPack’s typical customers, in terms of demographics and usage?
4.
We’ve heard that Amazon is marketing pharmaceuticals to its Prime customer base – how significant an uptake do you think it will have? What are the operational and marketing challenges? Is Amazon looking for a specific user niche, or something more broad?
5.
How can an independent mail order business compete with the vertically integrated model of services such as CVS Caremark?
6.
What are the limitations of PillPack’s model? We’ve talked about negotiations with PBMs [pharmacy benefit managers] – will PillPack want to negotiate to move from its 30-day supply model to a 90-day one?
7.
Amazon was found to be a direct competitor to CVS’s PBM arm, CVS Caremark in a lawsuit this year. How viable do you think it would be for Amazon to cut out the PBM middleman, and perhaps acquire a company such as MedImpact, or even a cloud-based PBM such as RxAdvance?
8.
This may be a speculative question, but do any acquisition targets stand out to you, because of the difficulty of entering this industry, such as MedImpact or RxAdvance?
9.
We’ve discussed PillPack’s limitations and how Amazon will help mitigate those in terms of operations, negotiations, etc. Are there any other market limitations PillPack has faced which Amazon can help mitigate?
10.
You mentioned the limitations of Schedule 2 drug distribution and the inability to distribute those across state lines. Could Amazon set up distribution centres in some of its larger market states and distribute from there, or is there some limitation there?
11.
Amazon seems to be developing an OTC [over-the-counter] private label for drugs such as ibuprofen. How is that business growing? What do you think its market potential is?
12.
Do you think Amazon plans to enter the pet medication business? If so, how? What might the advantages and disadvantages be?
13.
How do you view Amazon’s prospects of developing a B2B business, in terms of selling drugs or medical and surgical supplies to hospitals, etc?
14.
Do you foresee Amazon moving into cold-chain distribution?
15.
Do you think Amazon is likely to make a speciality pharmacy play, and if so, would it enter the market via acquisition?
16.
On the public payer side, how do Medicare and Medicaid work with someone trying to use Amazon PillPack?
17.
How willing are healthcare providers to prescribe drugs using Amazon PillPack? Is the onus on the patients themselves to participate?
18.
What are your thoughts on the lawsuit Amazon is facing with Walgreens? How might this affect the Amazon PillPack service? For context, the lawsuit is about Amazon’s ability to switch users from their existing pharmacies, and the methods it can use to do so.
19.
How do you foresee Amazon competing with the buying power of the big three generic drug distributors [AmerisourceBergen, Cardinal Health, and McKesson]?
20.
What is your view of the newer players entering the digital pharma sector? How are companies such as Capsule, Alto and NowRx positioned vs PillPack with Amazon’s backing?
21.
On the retail side of the pharmacy sector, which players do you think are significantly affected by Amazon’s growing abilities? How might Walmart be affected? How might other companies be affected?
22.
Is there anything else you would like to highlight about PillPack and the pharmacy sector?
23.
What is your 12-24 month outlook for Amazon and PillPack, or the wider industry? What might be the upsides and downsides?
