Prescription delivery is one of the business sectors that's been spotlighted by the coronavirus pandemic.
Even ahead of the pandemic, this space was seen as one with potential. Drugs are commodities, and pharma companies are defensive plays that tend to do well even during a downturn.
Additionally, the proportion of population in the elderly age bracket has been on the rise given the advancement in drug research and the availability of health care.
All of this adds up to a huge opportunity for prescription delivery providers.
Prescription Delivery Stocks: Amazon.com, Inc. AMZN: Online retail behemoth Amazon, which has disrupted several sectors, has made a big push into doorstep drug delivery.
The company announced Amazon Pharmacy on Tuesday, a new store on Amazon that allows customers to buy prescription medicines by placing orders on their desktops or mobile devices through the Amazon App.
The total addressable market opportunity for prescriptions in the U.S. includes $360 billion in prescriptions that are filled annually, and about $150 billion in prescriptions that are written but not filled due to cost and inconvenience to customers, according to BofA Securities.
The firm estimates that a mid-to-high teens percentage share of prescriptions are fulfilled through mail or delivery.
At the high end, this would represent a roughly $95 billion annual total addressable market for Amazon Pharmacy.
The adjacent health care segments that Amazon Pharmacy could address include pharmaceutical manufacturer advertising, which translates to an additional $30 billion TAM, BofA said.
The services Amazon Pharmacy envisages include allowing customers to make pharmacy purchases on Amazon and providing customers an up to 80% discount on generic drugs and 40% discount on off-brand drugs through Prime Rx, a prescription savings benefit for Prime customers.
Amazon acquired Boston-based online pharmacy start-up PillPack in 2018, thwarting Walmart Inc's WMT attempt to buy the company.
Related Link: GoodRx Surges 53% On Trading Debut After $1.1B IPO
Walmart Pharmacy: The retail giant's pharmacy unit provides home delivery services for orders placed by phone.
Prescriptions are usually sent through first-class mail and arrive within seven to 10 business days, with expedited shipping possible for an additional fee.
Recently, Walmart's Sam's Club unit announced a partnership with DoorDash Inc for same-day delivery of prescription medicines.
Walgreens Boots Alliance Inc WBA has a presence in the online pharmacy business through AllianceRX Walgreens Prime — a collaboration between Walgreens and pharmacy benefit manager Prime Therapeutics. Its mail-delivery service allows customers to receive a 90-day supply of maintenance medications delivered at home.
Additionally, Walgreens also does deliveries through Walgreens Express.
CVS Health Corp CVS, which launched prescription delivery service in 2018, refined its offering to allow same-day delivery the following year. The delivery is done by Shipt.
Goodrx Holdings Inc GDRX, which went public in late September, has seen its shares stagnate after a strong debut.
After listing at $46.70, up from the IPO price of $33, the stock ended the debut session at $50.50, a gain of 53%.
The stock was holding above the $46 level for the most part before the Amazon news pulled it lower this week.
GoodRx, founded in 2011, began as a health care platform that compares prices of medications, and offers free coupons for less than the cash price of prescriptions.
The company launched GoodRx Gold, a prescription savings program, which offers prescription mail delivery through its partner Truepill.
NowRx: This California-based, technology-enbaled pharmacy start-up uses a proprietary pharmacy software called QuickFill and advanced logistics technology to provide same-day and same-hour delivery of prescription medications.
In mid-July, the company completed a $20-million Series B funding round through SeedInvest.com, a crowdfunding platform.
The company said then it intends to use the funds to launch more high-tech micro-fulfilment centers and to accelerate the technology roadmap for its proprietary pharmacy management software and logistics technology.
Although NowRx is not publicly traded, investors can buy into the company and its future by partaking in the funding rounds.
Related Link: BofA Cuts Walgreens Earnings Estimate, Says Visibility Limited On Pharmacy Chain's Growth
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