Amazon Pharmacy launched in the US this month. Experts weigh in on whether it could work in Australia.

Could Amazon Pharmacy work in Australia? Image: Getty
  • Amazon Pharmacy launched in the US this month, allowing customers to buy prescription medicines online though Amazon and have them delivered.
  • While the service is only available in the US so far, experts weighed in on whether it could work in Australia.
  • The Pharmaceutical Guild of Australia said the country’s market for prescription medications is “highly regulated”, which would be a significant barrier for Amazon.
  • Visit Business Insider Australia’s homepage for more stories.

Amazon Pharmacy launched in the US this month – but could it work in Australia?

Amazon Pharmacy is the latest extension Amazon empire, allowing customers in the US to buy prescription medications online and have them delivered. The service launched last week, with one senior research analyst saying it could be a trillion-dollar opportunity for Amazon.

So far, it’s a US-only service. But in January 2020, Amazon filed an Australian trademark for “Amazon Pharmacy” to IP Australia, the Sydney Morning Herald reported.

When asked by Business Insider Australia, a spokesperson for Amazon Australia said Amazon Pharmacy is a “US-only initiative.”

So was the trademark registration a simple act of intellectual property defence rather than an actual forward plan to enter the local market? The Pharmacy Guild of Australia believes so, pointing to how heavily regulated Australia’s pharmaceutical industry is.

“The Australian market for prescription pharmaceuticals is quite highly regulated in a way which we say is beneficial for consumers but in a way which certainly distinguishes it from the American market,” Greg Turnbull, communications director at the PGA, told Business Insider Australia. “[It] may well impede Amazon acting as a pharmacy in Australia in the same way that they might in the United States.”

Turnbull explained that in Australia, only a registered Australian pharmacist can own a pharmacy, rather than a company.

“Any body wanting to supply prescription medications in Australia needs to do it within the Australian legal framework,” he added. “And it’s not for us to say how Amazon can do that. That particular ball is in their court.”

The challenges of having Amazon Pharmacy in Australia

Lesley Russell, Adjunct Associate Professor at the Menzies Centre for Health Policy, told Business Insider Australia there are a number of major challenges Amazon would face if it brought Amazon Pharmacy to Australia.

“The first is that in order to distribute pharmaceutical products in Australia, there are quite a number of legal hurdles that you have to face under the National Health Act,” she said. “Not anybody can prescribe products and the places where this is done have to be regulated as well.

“Australia has really quite strict standards about who can be a pharmacist, who can own a pharmacy, who can distribute drugs [and] medicines.”

The second major barrier Russell mentioned was the Pharmaceutical Benefits Scheme (PBS), which covers the vast majority of prescription medicine in Australia. The scheme identifies the medication that is subsidised by the government and regulates their prices.

“There is next to no ability to change the markups on drugs in such a way that it would be more or less profitable than what currently goes on in pharmacy,” she said.

The Pharmacy Guild also mentioned the PBS and believes Australia’s pricing system is not only different to that in the US but “vastly superior”.

“There are Hepatitis C medicines that cost $15,000 for a months’ supply. In Australia, a concession card holder or pensioner can get that for $6.50,” Turnbull said. “It’s very hard to discount that price.”

He added that “there’s not a lot of scope for Amazon or anyone else to be discounting” the current prices as subsidised by the government.

“The price online may well be the same as the price from your local pharmacy,” he said. “In many cases, that is a fact. Not a fact in the United States, a fact in Australia.

“For that reason, given a choice between buying something online and waiting patiently at your letterbox for it to arrive two or three days later, why wouldn’t you walk around the corner to your local pharmacy and get it for the same price there?”

Russell said that Australians “really value pharmacy and pharmacists”.

“If you look at the surveys that are done from time to time of who do you trust the most? Pharmacists always rank near the top,” she said, adding that people value the ability to see a pharmacist to help them manage their medicines properly.

“That aspect is sometimes called the quality use of medicines. It’s really about making sure that people take the medicines that are prescribed for them properly so that they get value for money but they also get improved health outcomes,” Russell added.

While this isn’t impossible to deliver by mail, Russell believes “it’s much harder.”

When asked whether pharmacists should be concerned about Amazon Pharmacy possibly entering the country, Turnbull emphasised a much broader need for businesses to prepare for disruption.

“I think all businesses in all markets need to be aware [of] the prospect of change and disruption,” he said.

“Laws are subject to change and amendment.”