Amazon Moves To Disrupt Pharmacy Space With 'Amazon Pharmacy'

Amazon.com, Inc (NASDAQ: AMZN) has launched its online pharmacy store called "Amazon Pharmacy," as it looks to disrupt the highly lucrative $300 billion pharmacy market.

What Happened: Amazon's foray into the pharmacy space was widely anticipated after its PillPack acquisition in 2018.

Amazon Pharmacy will allow customers in the U.S. to order prescription medications for home delivery, including free delivery for Prime members. It will also allow adding insurance information and managing prescriptions online.

According to CNBC, Amazon Pharmacy is built in part on PillPack's software, fulfillment centers, and health plan relationships.

The online pharmacy will be accessible to users over the age of 18 and in 45 states, excluding Hawaii, Illinois, Kentucky, Louisiana, and Minnesota. The e-tailer will service those states over time -- CNBC.

Doctors can send prescriptions directly to Amazon Pharmacy, or patients can transfer prescriptions from existing retailers like CVS Health Corp (NYSE: CVS) or Walgreens Boots Alliance Inc (NASDAQ: WBA). Amazon will not deliver Schedule II drugs, including most opioids.

Why It Matters: Amazon's move into the pharmacy space threatens the dominance of traditional pharmacies like CVS, Walgreens, Rite Aid Corporation (NYSE: RAD), and Walmart Inc (NYSE: WMT).

The move is well-timed as consumers are shifting to getting their medicines via mail to avoid exposure to the coronavirus.

"We wanted to make it easy for people to get their medication, understand the cost and get it delivered to the home," said TJ Parker, PillPack co-founder and vice president of Amazon Pharmacy to CNBC.

Pre-market Price Action: AMZN shares are down 0.13% at $3085.67 in the pre-market session on the last check Tuesday. CVS shares have tumbled 7.06% at $68.28, RAD shares have fallen 8.66% at $11.81, WBA shares are down by 9.34% to $39.98.