Analysis: Amazon office pharmacy kiosks sound novel, but execution is difficult

Amazon is no stranger to experimenting in healthcare, even if it means admitting failure. Its latest bold venture? One Medical offices have in-office pharmacy kiosks where patients can pick up their prescriptions immediately after their appointment.

Beginning in December, the kiosks will be available at One Medical locations throughout the Los Angeles area, such as downtown Los Angeles, Beverly Hills, Long Beach and West Hollywood. The company plans to expand to other locations future.

Industry observers say that while the idea of ​​medical kiosks is interesting, it is not new. Additionally, the physical maintenance challenges of kiosks can be significant. But given Amazon's size, people will definitely be paying attention to this announcement as they have been with all the other Amazon Health news in the past. One expert noted that the company overstated its ability to obtain services in resource-constrained areas of the country because of its ties to One Medical locations that are primarily in urban and affluent areas.

But first things first. What's in the kiosk?

The kiosks will carry commonly prescribed medications, including those to treat infections, asthma, high blood pressure, diabetes and other chronic conditions. They will not provide controlled substances or specialty medications. Each kiosk's inventory will be specific to each location's prescription pattern.

To get their medication at the kiosk, patients need to create an Amazon Pharmacy account, schedule an appointment at a participating One Medical location, and ask the provider to send their prescription to Amazon Pharmacy.

Patients can then view and select a pickup kiosk on the Amazon app and pay using their preferred method, whether through insurance or credit card. Patients will be able to view upfront costs, such as available discounts and insurance deductibles. They will receive a QR code that can be scanned at the kiosk. If they have any questions, they can connect with an Amazon pharmacist at the kiosk or later for a video or phone consultation.

Hannah McClellan, Amazon's vice president of pharmacy operations, said Amazon launched the kiosks to remove a common barrier to accessing care: the need for a second trip to the pharmacy after a doctor's visit.

“Nearly one-third of prescriptions in the United States are never filled, often because of friction between diagnosis and refilling,” McClellan said in an email. “By bringing the pharmacy experience directly to the doctor's office, we are helping patients get the medications they need faster and with the clinical support they expect from a pharmacy.”

While these kiosks may seem like a good idea in theory, at least one investor thinks they'll be very difficult to execute.

“There are a lot of barriers to this model…the cost of running these kiosks, running a network of kiosks that includes power, maintenance and repairs is very, very expensive, very expensive,” Michael Greeley, co-founder and general partner at Flare Capital Partners, said in an interview.

There are also cleaning issues in the wake of the Covid-19 pandemic, as people may not want to touch medication machines. Greeley noted that patients may want more privacy than at kiosks—although placing them in a medical setting like One Medical may provide more privacy.

The concept isn't necessarily new, he added. Several other companies have tried to launch similar models, but have failed. For example, primary care company Forward has introduced CarePods in malls and office buildings, where patients can draw blood and throat swabs. The company will close in 2024. HealthSpot also offered telemedicine kiosks but closed in 2016.

However, Amazon may be in a better position to expand these kiosks than some other companies, and Greeley added that he would “never bet against Amazon.”

Others are slightly less skeptical of the kiosks, such as Dan Zohorsky, managing partner at Healthworx, the innovation and investment arm of insurance company CareFirst. He called the kiosks innovative and said they have the potential to solve challenges in accessing prescription drugs.

“Inconvenience and a clunky experience are the leading reasons why American patients don't fill their medications or abandon their prescriptions,” Zochowski said. “With the number of retail pharmacies in the United States declining dramatically over the past decade, this unpleasant two-stop experience—where patients must first visit a healthcare provider's office and then travel to a retail pharmacy—is only going to get worse.”

Another healthcare expert said this could boost Amazon's revenue.

“Judging from the patient's behavior [point of view]”Amazon's kiosks can also serve as a bridge, connecting the first fill of a medication and any repeat refills through its acquisition of PillPack,” said Warren Templeton, managing director of AMA Venture Studio Health2047. “Amazon is probably pinpointing the revenue leakage between OneMedical and PillPack, and here's the solution: When you're not feeling well, waiting a day for your medication to be delivered is preferable to running to your local pharmacy.” “

What makes Amazon's kiosks successful?

Templeton said Amazon needed to meet three criteria for the kiosk to be successful. First, they need to get sales through One Medical locations. Kiosks must also have enough inventory to fill each patient's entire prescription, not just part of it, he added. Finally, the cost of prescription drugs must be comparable to existing dispensing locations.

“Consumers are used to buying prescription drugs. Different PBMs get different pricing, which is directly related to the location of the pharmacy,” he said. “Those who are price-conscious may seek point-of-sale transparency or may turn to online pharmacy apps.”

Zochowski added that kiosks and apps must be easy to use and prescriptions must be dispensed quickly. Consumers will have less patience waiting in line at a kiosk than at a pharmacy counter. He stressed that a large inventory of medicines is crucial – if patients cannot fill all their prescriptions at the kiosk, they may continue to use their usual pharmacy.

The kiosks must also be located outside One Medical clinics, Zohorsky said.

“One Medical is a 'membership-based' primary care model that requires members to pay out-of-pocket costs to access care. The description that these kiosks will improve services in 'pharmacy deserts' is misleading because One Medical clinics are primarily located in affluent areas,” he argued.

When asked if Amazon expected to expand kiosks to other providers in the future, McClellan noted that the plan was to “explore expansion to additional locations.”

Greeley believes that in order for kiosks to be successful, they must be in a semi-supervised environment. If someone needs help or is unable to operate the machine, there will be support available.

“I get nervous when dispensing prescriptions because there is a real risk of abuse,” he added. “I think the more clinical it is, the more nervous I would be about that model, at least initially, until you really understand consumer behavior. Do people really want to change that in health care?”

Photo: Flickr, Cerillion Skyline