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Pharmacy Stocks Hit by Amazon's Entry

Pharmacy stocks such as CVS and Walgreens Boots Alliance are down on the news that Amazon is opening its online pharmacy. Walgreens is down 8%. What's it all mean? It means that the pie is being divided up more and is it being divided by a major player - Amazon. A player that can deliver to your office or residence the same day or at worst 48 hours. The issue for the current major players is that is takes capital - a lot of capital - to catchup to a new player that has a disruptive solution. Therefore, to compete with Amazon capital will need to be spent and spent fast and smartly. How do you beat the gorilla? Be smart, be fast, offer something the gorilla can't.

What the first concern with prescriptions? Cost! Amazon will accept most insurance it states but it will also offer Prime members discounts! Amazon is skilled at how to jump in, what markets are attractive and primed for disruption and how to quickly gain market share.


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