Amazon Debuts RxPass Prescription Drug Add-On for Prime Subscribers Transcript

Amazon, it seems. Is rolling out a new prescription medication add-on for its Prime members.

They’re calling it RX Pass, and it’s offering access to more than 50 generic medications for $5 per month. Let’s bring in Eugene Kim, now. He’s the chief tech correspondent at Insider, can help us understand this a little bit more. Eugene, what type of medications will subscribers have access to? How big of a deal is this?

Yeah. It’s basically a new online pharmacy service. For a flat fee of $5 a month, existing Prime members get access to … They can order as many drugs as they want from a choice of over 50 generic medications. These drugs are mostly used to treat very common health conditions like high blood pressure, anxiety, and diabetes. The only requirement to use this service for now, it appears that you just have to be an existing Amazon Prime member, which costs $139 a year.

Okay. Eugene, help us understand why this is a better service. Do you pay the $5 and then you still have to pay for your prescriptions, or it’s all-encompassing? Can they fill subscriptions from any doctor? Give us a little more of how this works.

So, again, you have to be an existing Amazon Prime member, which is for $139 a year you get access to a bunch of other perks like free shipping, a Netflix-type video streaming service, and if you pay an additional $5, you get unlimited orders of these generic medications. Amazon has a separate Amazon Pharmacy service that offers a broader range of products. This one is a little more narrower in scope. Also, RX Pass, which launched yesterday, it doesn’t offer specialty medications like insulin or it’s not available for government-funded insurance like Medicaid or Medicare. For now, it’s only available in 42 states in the US, so maybe a little narrower in scope right now, but Amazon has a history of starting small and expanding later, so it’s possible they’ll roll it out for broader range of products in the future.

I’m still trying to understand you, Eugene. I’m sorry. For the $5, you get unlimited access to all of these, or it’s included? Are you paying additional money for the pills that you need?

No, no. It’s all included in that $5.

So it could end up saving you a lot of money,

Right. But my understanding is a lot of these medications are already pretty cheap. They’re not expensive pills, so Amazon’s goal is not … I don’t think they expect a lot of revenue boost from this. It’s more intended to draw in more people to try its Prime membership and a bunch of other healthcare initiatives they’re focused on right now.

I guess it does signal a significant shift to your point that Amazon could grow and develop this over time. They’re not the only company in this space either. You think about billionaire Mark Cuban, he has his Cost Plus Drug company with 350 drugs available for at-cost plus 15%. What do you make of this move in general and other startups trying to basically be a better alternative to what the government provides and what some private companies provide?

Yeah. Almost every big tech company and a whole bunch of startups are doing something in healthcare and online pharmacy. They all know it’s a very inefficient market. They want to improve it and disrupt it for the consumers. But we all know the American healthcare system is very complicated. There’s a lot of stakeholders, so it’s taking a lot of time, and for now we haven’t seen much change or improvement. Amazon has been very vague on its progress so far, but I think this move, it just shows Amazon’s continued interest in healthcare. The announcement came while Amazon is laying off 18,000 people, so that just shows Amazon’s commitment to healthcare and I think it really underscores their ambition in this market.

Interesting changes. All right. Eugene Kim, thank you for explaining it all to us.

Thanks.