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Amazon (AMZN) Boosts Pharmacy Efforts With Lilly's Partnership
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Amazon (AMZN - Free Report) teamed up with Eli Lilly (LLY - Free Report) to expand its footprint in pharmacy efforts.
Per the terms, Lilly has selected Amazon Pharmacy for the home delivery of drug prescriptions that are sent to its direct-to-consumer service, LillyDirect.
This service is limited to certain drugs, which include medications for diabetes, obesity and migraine.
This deal, which is meant to provide timely access to prescribed medicines for chronic diseases, remains crucial in the healthcare industry, as cases of diabetes and obesity are continuously increasing, because of which the risk of cardiovascular disease is rising at an alarming rate.
Moreover, the partnership is expected to be beneficial for both companies. Lilly will be able to address the increasing customer demand for its medicines seamlessly on the back of Amazon’s ultrafast delivery speed.
Then again, Amazon Pharmacy will be able to expand its reach to patients, which, in turn, will benefit its online retail business — the key growth driver for Amazon.
AMZN has gained 86% over a year, outperforming the industry’s rally of 55.8%.
In fourth-quarter 2023, the company’s online store sales came in at $70.54 billion, up 9% year over year.
Amazon remains well-poised to capitalize on the growth prospects in the online pharmacy market on the back of its aggressive efforts.
Per a report from Statista, the market is expected to generate revenues of $52.51 billion in 2024. The figure is expected to hit $81.37 billion by 2028, witnessing a CAGR of 11.6% between 2024 and 2028.
Amazon Pharmacy, which is considered to be the first of its kind, is accessible via the Amazon app. It allows customers to place their medicine orders with the help of a prescription from a licensed healthcare provider.
It offers door-to-door delivery of the ordered medicines, along with free two-day delivery to Prime members.
Additionally, customers are allowed to upload their insurance information securely on their pharmacy profile on the Amazon app and opt for the payment mode before checking out.
The company’s introduction of RxPass, a Prime membership benefit, is another plus. It enables Prime members to receive all of their eligible medications for one flat monthly fee of $5 and get them delivered for free.
The company recently launched the drone delivery of medicines from Amazon Pharmacy, which is a major positive. Amazon Pharmacy promises to drop a package within 60 minutes of order placement.
All these efforts will not only aid its online store sales but also will drive growth in its subscription revenues, thanks to pharmacy related Prime perks. This, in turn, will likely drive Amazon’s overall top-line growth.
For first-quarter 2024, Amazon expects net sales between $138 billion and $143.5 billion. Net sales are expected to grow 8-13% from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for the same is pegged at $142.42 billion.
Image: Bigstock
Amazon (AMZN) Boosts Pharmacy Efforts With Lilly's Partnership
Amazon (AMZN - Free Report) teamed up with Eli Lilly (LLY - Free Report) to expand its footprint in pharmacy efforts.
Per the terms, Lilly has selected Amazon Pharmacy for the home delivery of drug prescriptions that are sent to its direct-to-consumer service, LillyDirect.
This service is limited to certain drugs, which include medications for diabetes, obesity and migraine.
This deal, which is meant to provide timely access to prescribed medicines for chronic diseases, remains crucial in the healthcare industry, as cases of diabetes and obesity are continuously increasing, because of which the risk of cardiovascular disease is rising at an alarming rate.
Moreover, the partnership is expected to be beneficial for both companies. Lilly will be able to address the increasing customer demand for its medicines seamlessly on the back of Amazon’s ultrafast delivery speed.
Then again, Amazon Pharmacy will be able to expand its reach to patients, which, in turn, will benefit its online retail business — the key growth driver for Amazon.
AMZN has gained 86% over a year, outperforming the industry’s rally of 55.8%.
In fourth-quarter 2023, the company’s online store sales came in at $70.54 billion, up 9% year over year.
Amazon.com, Inc. Price and Consensus
Amazon.com, Inc. price-consensus-chart | Amazon.com, Inc. Quote
Amazon’s Aggressive Stance on Pharma Retail
Amazon remains well-poised to capitalize on the growth prospects in the online pharmacy market on the back of its aggressive efforts.
Per a report from Statista, the market is expected to generate revenues of $52.51 billion in 2024. The figure is expected to hit $81.37 billion by 2028, witnessing a CAGR of 11.6% between 2024 and 2028.
Amazon Pharmacy, which is considered to be the first of its kind, is accessible via the Amazon app. It allows customers to place their medicine orders with the help of a prescription from a licensed healthcare provider.
It offers door-to-door delivery of the ordered medicines, along with free two-day delivery to Prime members.
Additionally, customers are allowed to upload their insurance information securely on their pharmacy profile on the Amazon app and opt for the payment mode before checking out.
The company’s introduction of RxPass, a Prime membership benefit, is another plus. It enables Prime members to receive all of their eligible medications for one flat monthly fee of $5 and get them delivered for free.
The company recently launched the drone delivery of medicines from Amazon Pharmacy, which is a major positive. Amazon Pharmacy promises to drop a package within 60 minutes of order placement.
All these efforts will not only aid its online store sales but also will drive growth in its subscription revenues, thanks to pharmacy related Prime perks. This, in turn, will likely drive Amazon’s overall top-line growth.
For first-quarter 2024, Amazon expects net sales between $138 billion and $143.5 billion. Net sales are expected to grow 8-13% from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for the same is pegged at $142.42 billion.
Zacks Rank & Other Stocks to Consider
Currently, Amazon has a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the retail-wholesale sector are eBay (EBAY - Free Report) and The Kroger Co. (KR - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
eBay has gained 20.7% on a year-to-date basis. The long-term earnings growth rate for EBAY is projected at 6.71%.
Kroger has gained 22% on a year-to-date basis. The long-term earnings growth rate for KR is projected at 4.84%.