Amazon’s pharmacy business is expected to reach $2 billion in sales as shopper interest skyrockets, a top analyst says
Prescription medications from Amazon Pharmacy.
Amazon’s online pharmacy business is drawing significantly more customer interest now, and it could generate roughly $2 billion in revenue this year, according to financial firm Evercore.
In a note published last week, Evercore analyst Mark Mahaney highlighted his firm’s recent survey showing rising interest in and usage of Amazon Pharmacy.
A record 45% of Amazon customers are now “extremely interested” or “very interested” in buying online medications from the company, up from just 34% last year and 14% in 2020. It was the largest year-over-year increase in purchase intent for pharmaceuticals among Amazon shoppers in the past 8 years, the note said. Evercore ran the survey in June and included 1,100 respondents.
The survey also found that a record 13% of Amazon customers have purchased pharma products from Amazon, compared to just 9% last year.
All this could result in roughly $2 billion in revenue for Amazon’s pharmacy business, Evercore estimated, based on “several sources.” B-17 previously reported that Amazon’s internal forecast showed its pharmacy business generating $1.8 billion in sales after recording $1.25 billion last year.
Amazon’s growth in this space is squeezing retail pharmacy businesses too. On Tuesday, the Wall Street Journal reported Walgreens was in talks to sell itself to a private equity firm.
Evercore believes half of Prime membership households will eventually shop for online medications on Amazon, which could result in $33 billion in additional revenue and $1.6 billion in operating income over the next 3 to 5 years.
“This inflection in consumer intent to purchase prescriptions online, and on Amazon, may well be a sign of Amazon closing in on a potential Rx market unlock,” Mahaney wrote in the note.
Mahaney also wrote that Amazon is aggressively expanding its same-day delivery service for pharmaceutical products, noting a recent announcement to cover nearly half of US consumers by the end of 2025. He also highlighted the sheer size of the US prescription market, about $435 billion in size, of which Amazon Pharmacy has penetrated less than 1%.
Amazon’s spokesperson declined to comment.
