The online pharmacy market is rapidly expanding around the world at such a fast pace that could affect the off-line pharmaceutical distribution market, a report said.
According to Marketwatch, the global online pharmacy market is worth about $44.95 billion and is expected to grow by 18.7 percent annually on average. By 2026, the market will hit $211.36 billion with explosive growth, the market data provider said.
Industry watchers said global e-commerce operator Amazon’s acquisition of PillPack, an online pharmacy, for $1 billion has prompted the online pharmaceutical distribution market to become larger.
The intricate U.S. online drug distribution network used to be a barrier for Amazon’s entry to the healthcare market but PillPack has become a breakthrough, observers said.
After buying out PillPack, Amazon obtained approval to distribute medicines online across the 50 states in the U.S. and begun drug delivery service in earnest.
The Korea Biotechnology Industry Organization (Korea Bio)’s Korea Bio-Economy Research Center published a report on changes in the U.S. online pharmaceutical distribution market.
The report said Korea should pay attention to how the expansion of the online pharmacy market affects the pharmaceutical industry by looking at the case of Amazon’s acquisition of PillPack.
The report noted that after Amazon announced its plan to take over PillPack on June 28, shares of offline pharmaceutical distributors Rite Aid, CVS Health, and Walgreen Boots Alliance fell.
“With Amazon’s acquisition of PillPack, patients are expected to purchase drugs at a lower, standardized price. Amazon’s existing distribution channels will provide a broader range of medicines, which will result in economies of scale,” said Ahn Ji-young, a fellow researcher at Korea Bio and the author of the report. “Patients will be able to buy prescription drugs at a lower price than those offered off-line.”
Ahn pointed out that the online pharmacy market has already taken shape in the U.S., the U.K., Japan, China, and India.
“Some of them are selling prescription drugs to general consumers on a business-to-consumer basis,” Ahn said. “China and India are pushing to vitalize online distribution channels.”