Analysts say Amazon is poised to disrupt the $ 934.8 billion dollar global pharmaceutical industry.
Nimble Pharmacy was among a crop of emerging companies, backed by venture capitalists, aiming to deliver prescription drugs from their own pharmacies to consumers’ homes or offices. Then Amazon bought online pharmacy PillPack in 2018, and Nimble needed to find a new business.
Earlier this year, the company shut down its six physical pharmacy locations, which were scattered across the Bay Area, and cut about half its staff — 40 people — to focus on developing a delivery service that could partner with independent brick-and-mortar pharmacies. To use the grocery analogy, instead of being a supermarket, Nimble would be like Instacart.
The big chain pharmacies like CVS and Walgreens are getting into delivery, and Amazon is investing heavily in PillPack following the $ 753 million acquisition, so that consumers can get all their medicines by mail, along with automatic refills and 24/7 customer support. That leaves independent pharmacies in a vulnerable position.
“They now recognize that the world is changing, and they’re seeing acceleration of the service from Amazon-owned PillPack, as well as Walgreens and CVS launching delivery options of their own,” said Nimble CEO Talha Sattar.
Founded in 2014, Nimble has raised about $ 60 million from investors including Sequoia and Khosla Ventures. It described itself as a “full-service pharmacy” taking the “hassle out of the pharmacy experience.” But Sattar said the physical pharmacies were too expensive to operate, and it was too difficult to get doctors on board.
Working with the locals
Nimble turned its attention to the country’s 20,000 independent pharmacies. Since Sattar started pitching them the idea in January, he said he signed up more than 600 pharmacies and has reached tens of thousands of customers. Bartell Drugs, a pharmacy chain based in Amazon’s hometown of Seattle, updated its website this week to offer a “prescription delivery” service that’s “powered by Nimble.”
Through Nimble, customers “get prescriptions delivered right to your door the same day they’re ready for pick-up,” the site says.
While Nimble can offer a much needed and valuable service for small pharmacies, it’s still a tough business. The company has to hire engineers to build and maintain the software for pulling in patient data, taking orders and managing the customer experience and has to pay for delivery people, all while taking a cut of each transaction from the pharmacy and a fee from the consumer.
Bartell says it charges a $ 6.99 delivery fee plus a 99 cent service fee on top of the standard copay and any taxes. That’s comparable to what CVS charges for same-day delivery and a little more than Walgreens’ next-day service.
For now, Nimble can steer clear of Amazon because PillPack’s focus is on serving people with chronic conditions, like high cholesterol and diabetes but not those who have acute issues like migraines or infections. But PillPack’s service is free, and Amazon could very well push toward speedier delivery of more drugs as it broadens its same-day and next-day offerings.