Amazon Rx: a cure for supply chain kickbacks or just another poison pill?

Amazon is throwing its hat into the pharmacy business and Bob Campbell, MD of Physicians Against Drug Shortages weighs in on what this could mean:

The Amazon folks do not show their cards. When this began it was called the 1492 Project before it was reported by the press. I have asked them directly are you trying to undercut the GPO/PBM supply chain or do you just want to get in on the kickbacks? They didn’t say then and they don’t say now.

Some insights…they hired a ton of people from the GPO industry presumably to understand the supply chain dynamics.

Their initial focus was the hospital supply chain but they subsequently backed down from that publicly due to the “special relationships” of GPO and Hospital entities. Now their focus is the outpatient pharmaceuticals.

I have maintained that Amazon is the only non governmental entity with the scale and resources to create a parallel competitive marketplace as an alternative to the normal anticompetitive market. Still they will never dominate only survive and carve out a niche. The easier more lucrative approach would be to collect kickbacks. Amazon is different enough they may do the right thing. The Bezos model is your margin is our opportunity. The 43% Kickback rate in outpatient Pharma plus the usual participant margins makes for a fat gross margin to target.

Until Amazon says what they are really up to we can only speculate.