Amazon Rolls Out $5-A-Month Pharmacy Subscription That May Not Save Money

Amazon continues to pave its way in the health care sector.

The company announced on Tuesday it launched a $5 monthly subscription for Prime users that allows them to access around 50 generic medications to treat over 80 common health problems like anxiety, bacterial infections and high blood pressure.

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The membership benefit, RxPass, is another notch on the belt for the e-commerce and cloud giant as it continues to establish itself in the health care world. It launched Amazon Clinic, a telehealth offering akin to a low-urgency urgent care, back in November. The company also acquired telehealth startup One Medical in July.

“Over the last decade as a practicing pulmonologist, I have seen patients with chronic diseases struggle to get access to the basic medications they need to live their lives well,” said Dr. Vin Gupta, chief medical officer at Amazon Pharmacy. “Navigating insurance can be a maze and getting to the pharmacy a burden. Sometimes that has led to poor outcomes: New medications don’t get filled, refills don’t get picked up, and patients suffer.”

Pharmacies are not moneymakers

In 2022, over $900 million was poured into the pharmacy startup space in an attempt to turn a profit in an area of health care that makes surprisingly little money. Pharmacies operate on razor-thin margins, in part because generic drugs cost pharmacists more money than insurance companies are willing to pay. Filling generic prescriptions at a loss is leading to the downfall of the local pharmacy and forcing companies like CVS and Walgreens to lean on drug store purchases to offset the cost of running pharmacies.

Given that the pharmacy model is inherently low-profit, it’s hard to see how RxPass will save customers money at no cost to Amazon. Like other popular pharmacy-related companies (think The Mark Cuban Cost Plus Drug Co. and GoodRx), users won’t be able to use RxPass along with their insurance. That will run patients $60 a year on generic medications that cost around $5 for a 30-day supply, on top of a $139 yearly Prime subscription.