Negotiations have intensified between Amazon and pharmacy benefits managers (PBMs), according to a report by Leerink Partners. In a move that could lead to partnerships or direct threats, whatever comes out of Amazon’s actions is expected to be disruptive in a major way.
PBMs act as the link between drug manufacturers and insurers, ensuring that the insurers’ pharmacy benefits are administered prudently. Due to their role in negotiating prices, the PBMs represent a vital component in the drug supply chain.
In the report, an unnamed analyst confirmed that the discussions were ongoing and there are expectations that some partnerships would come to fruition.
According to Leerink’s approximation, Amazon will need about 2 years to apply for and receive pharmacy licenses in 50 states and therefore any disruption is unlikely to happen any time soon.
However, all indications are that Amazon is planning an entry into the sector. Mark Lyons was lured from insurer Premera Blue Cross to put together an in-house PBM after Amazon announced it was looking to hire a general manager to lead its pharmacy enterprise. This was reported back in may by CNBC.
Most actors in the drug supply chain depicted Amazon as a prospective partner rather than a direct threat and expressed pessimism the retail giant would be willing to plunge into such a highly controlled environment.