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June 28, 2018 at 05:21 PM
Donald Trump has promised since his presidential campaign to drive down drug prices.x
(Related: What Happened to Trump’s Drug Price Promises?)
His business-world nemesis Jeff Bezos may be about to just do that.
Amazon.com Inc. entered the U.S. drug business with a big splash on Thursday. With the acquisition of online pharmacy PillPack, a Boston startup that has regulatory approval to deliver medicines throughout the country, the retail giant is taking its price-chopping, consumer-friendly approach to prescription drugs.
“Their scale will allow them to negotiate prices in a way that the drug industry has never seen before,” said Lisa Bielamowicz, president of the consultancy Gist Healthcare. “They have a company ethic of returning these kinds of savings to consumers.”
Trump, who once said drugmakers were “getting away with murder,” has little to show so far for his rhetoric, though his administration released a drug-pricing plan last month. On May 30, he said pharmaceutical companies would announce “ massive” pricing cuts in two weeks; none have yet done so.
Trump’s been attacking Bezos on many fronts since he was elected, claiming that Amazon takes advantage of the U.S. Postal Service and doesn’t pay its fair share of taxes. Bezos separately owns the Washington Post, a frequent target of the president’s Twitter fire.
Opaque System
High drug prices in the U.S. have drawn increasing scrutiny, as consumers face climbing out-of-pocket costs and drugmakers announce new treatments with six-figure price tags.
Before the PillPack deal, Bezos had signaled dissatisfaction with the current state of affairs, and Amazon recently formed a venture with JPMorgan Chase & Co. and Berkshire Hathaway Inc. to improve health care for their workers.
Tackling drug pricing won’t be easy. The eventual price a consumer pays for a treatment is influenced by an opaque system of drugmakers, insurers and middlemen called pharmacy-benefit managers. In recent months, the Trump administration has focused its criticism on PBMs, blaming them for their contribution to high prices. The White House didn’t return a request for comment on Amazon’s PillPack deal on Thursday.
PillPack now works within the existing system of insurers and PBMs. With Amazon’s backing, the company could pursue new ways of upending those relationships, with the potential to create savings for consumers.
