Why Long Pharmacy Lines Are Obsolete

Anyone forced to endure pharmacy personnel asking customers to repeat information, engaging in time-sucking arguments about insurance coverage, or wondering why a medication that's supposed to be ready isn't available can attest to the inefficiencies of the in-store pharmacy experience.

When viewed in this context, the strategic thinking behind Eli Lilly partnering with Amazon Pharmacy to send prescription drugs directly to patients' homes, through their new direct sales site LillyDirect makes all the sense in the world. 

Evolving Landscape Shifting Rapidly 

By joining forces with Amazon Pharmacy, Eli Lilly is able to offer free, two-day home delivery of prescriptions for select Lilly medications in diabetes, migraine and the red-hot obesity drug segment. 

It is important to note that Eli Lilly is not working exclusively with Amazon subscribers for home delivery through Amazon Pharmacy. Its partnership with Amazon Pharmacy extends far beyond Amazon subscribers as consumers can opt in for free home delivery regardless of their Amazon subscription status.

A Turnkey Partnership 

By tapping into Amazon’s massive logistical and technology infrastructure, LillyDirect delivers right out of the gate an end-to-end digital healthcare experience, including access to an online pharmacy for the company's medicines with free shipping, educational information about disease management, tools to find independent healthcare and manufacturer's savings on medicines. 

In providing a seamless online pharmacy experience, Amazon Pharmacy has disrupted the traditional retail pharmacy sector. The launch of Amazon Pharmacy has led to stock price drops for competitors like GoodRx, Rite Aid, Walgreens, and CVS Pharmacy, indicating the impact of this new entrant in the market. 

Amazon Pharmacy's focus on convenience, fast delivery, and competitive pricing has reshaped customer expectations and forced brick and mortar pharmacies to adapt to meet the changing demands of consumers.

More Convenient And Cost-Effective Access 

By offering home delivery of medications like the weight loss drug Zepbound which competes with Ozempic, Wegovy and generic semaglutide, Ely Lilly’s brilliant move is aimed squarely at enhancing customer experience, streamlining the distribution process and eliminating the need for patients to visit a doctor and pharmacy in person.

By setting up patients with telehealth providers that can prescribe medications, Lilly is squeezing out costs associated with traditional healthcare visits, making it easier for patients to access medications promptly and efficiently.

Although there is no direct mention of the Amazon Pharmacy partnership being in any way influenced or inspired by Mark Cuban's company Cost Plus, it couldn’t have gone unnoticed in Ely Lilly’s competitive analysis of the evolving pharmacy landscape. 

While it’s no coincidence that Cost Plus utilizes a home delivery model, to put it into perspective, as of March 2024, it has served roughly 2 million customers since its launch in January 2022. 

Although a promising start with a compelling narrative, visionary billionaire and TV star at the helm, it isn’t anywhere near reaching sufficient critical mass to attribute this unprecedented disruption to its existence.

Besides, Eli Lilly seems to be more focused on enhancing patient access and experience through innovative delivery models than in fending off threats from feisty startups. 

The Innovator’s Dilemma

Critics are quick to point out that home delivery of weight loss drugs on a massive scale can have significant negative implications. 

Concerns about potential risks associated with home delivery of weight loss drugs, such as the need for proper monitoring and oversight to ensure safe and appropriate use of these medications are not without some merit. 

The widespread availability of weight loss drugs through home delivery could raise questions about the potential misuse or abuse of these medications on a massive scale. 

Everything That Can Be Digital Will Be Digital 

But all that being said, no new breakthroughs in customer experience are free of inherent risks. The migration of medical records itself online is fraught with privacy and security concerns but they have improved the quality of our healthcare anyway. 

For the megaretailers, the home delivery model can be perceived as an existential threat or embraced as an historic opportunity to enhance customer convenience and satisfaction. 

By offering home delivery of medications, these retailers can cater to the evolving needs of consumers who seek more convenient ways to access their prescriptions. 

This model can help increase customer loyalty, attract new customers, and differentiate these retailers from competitors. 

On the flip side of the cynical view, home delivery can lead to improved medication adherence among patients, which is crucial for managing chronic conditions and overall health outcomes.

Incumbents On The Move

CVS's home delivery model aims to provide customers with seamless access to medications and healthcare products, enhancing convenience and accessibility for consumers.

In light of its new direct-to-consumer model, Eli Lilly's stock is up 31.84% during the first 3 months of 2024. This growth spike reflects investor confidence in the company's strategic shift towards direct sales and home delivery of medications.

Validating its growth strategy, nearly 30 analysts are bullish on Eli Lilly's stock, with a 12-month price target of $785.00 against an average of $700 per share in the first quarter of 2024.

Despite all the risks, the direct-to-consumer approach allowing customers to order medications online and have them delivered nationwide, will gain more traction as consumers demand greater accessibility, convenience and cost savings from healthcare providers. 

SWOT Report is now Business Intelligence Weekly. The creator and journalist behind the digital publication, Andrew Ellenberg, is President & Managing Partner of Rise Integrated, an innovative studio that creates, produces, and distributes original multimedia content across digital touchpoints. To submit story ideas or ask about custom multimedia publishing, call 816-506-1257, email andrew@riseintegrated.com, or read more of his work in Forbes. To learn about his company check out this profile story.