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Amazon likely gearing up to sell prescription drugs

Written by Diane Archer

Gizmodo reports that Amazon may be gearing up to sell prescription drugs online. The mega-retailer has sought and received approval for a wholesale pharmacy license in 12 states and has at least one additional application pending. If Amazon does indeed decide to sell drugs online, will Amazon drive down drug prices?

To be clear, as of now, Amazon’s interest in selling prescription drugs remains speculation. Amazon has not confirmed its intent to sell prescription drugs. But, it has a license to do so in Nevada, Arizona, North Dakota, Louisiana, Alabama, New Jersey, Michigan, Connecticut, Idaho, New Hampshire, Oregon and Tennessee. And, its license application is pending in Maine.

Amazon  could use these licenses in a number of ways. It needs the licenses to sell medical devices. And, some think it may want to sell prescription drugs in its Whole Foods stores. If it goes into the business of selling prescription drugs, it will shake up the market considerably.

Currently, the big chain pharmacies have some influence over the price of drugs, and they have used that influence largely to drive up prices for brand-name drugs. CVS, for example, receives rebates from manufacturers for the drugs it sells through the pharmacy benefit manager business it owns. Yet, it does not appear to be passing on these rebates to consumers to lower their costs. Amazon is likely to receive rebates as well and, in order to compete in the marketplace, may decide to pass them on.

Whatever savings Amazon is able to deliver, it will never get the deep discounts on brand-name drugs that are needed to keep drugs affordable. For that, we need the power of the federal government. If you want Congress to rein in drug prices, please sign this petition.

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