Amazon’s PillPack Deal Could Drive Industrial Property Demand
Retailer May Need Specialized Warehouses to Support Online Pharmacy
Amazon’s pending purchase of online pharmacy PillPack has the potential to create a need for specialized warehouse space to ship prescription drugs and even lead to small retail clinics, adding demand to an already surging industrial property market.
The move by the online retailer could have significant implications for industrial property sales, which outperformed other major commercial sectors across the U.S. in the second quarter as Amazon and other companies pump up their supply chains for e-commerce delivery, according to CoStar data.
“If you really read between the lines here, and kind of analyze this, Amazon wants to be part of every single transaction that happens in our lives,” said Gregory Healy, senior vice president of chain and logistics at Colliers International.
Amazon, the world’s largest retailer, bought PillPack in late June for an estimated $1 billion. PillPack holds pharmacy licenses in all 50 states and ships medications from its primary drug distribution center in Manchester, NH, to customers who take multiple daily prescriptions. The company is targeting a major market: On its website, PillPack says 40 million adults take more than five prescriptions each day.
If Amazon incorporates PillPack’s approximately 1 million customers into its Prime membership business, which has 100 million subscribers, the company would need drug distribution centers near large cities cleared to handle medicines, said Santo Leo, founder and CEO of MailMyPrescriptions.com in Boca Raton, FL.
Those could be small centers dotted across the country or a handful of larger ones. In either case, they will have to meet far more specialized state and federal requirements because the goods being handled are medicine, Leo said.
Though Amazon already owns or leases about 100 million square feet of distribution space, “you can’t just rip a warehouse out and put a pharmacy there,” said Leo, whose mail-order pharmacy is licensed to dispense prescription drugs in more than 40 states. “You need to design these from scratch. You need more power, more data, more security measures. Traditional big, bulky, automated facilities are just not designed for pharmaceuticals.”
Pharmaceutical warehouses must have processes in place for temperature control, security, documentation and the ability to address product recalls, said Carmine Catizone, executive director of the National Association of Boards of Pharmacy, which accredits wholesale pharmaceutical warehouses. Each state also has different licensing requirements.
The company may need new buildings for an online pharmacy, the analysts said. Though Amazon is opening fulfillment centers at a dizzying rate — eight so far in 2018 — it has a host of controls to ensure each center operates at maximum capacity and has little extra space, the company said in its 2017 annual report.
Amazon declined to comment on its plans for specialized PillPack warehouse space. Amazon hasn’t made any public statements about its PillPack strategy since shortly after the purchase, which is expected to close by the end of the year.
Amazon’s PillPack purchase follows its joint venture with Berkshire Hathaway Inc. and JPMorgan Chase to improve the U.S. health care system and cut costs. PillPack is part of that strategy, said Leo, who predicted Amazon would move quickly to grow PillPack to place pressure on health-care competitors.
“How do you keep people out of the doctor’s office or hospital lab? Make sure people take their prescriptions,” he said.
Healy said the purchase could have implications for any brick-and-mortar plans Amazon has as well, noting the trend toward small, walk-in clinics across the country. It’s estimated there are now almost 3,000 such clinics, according to Accenture. He also speculated that Amazon could add pharmacy services to its Whole Foods stores.
“It will probably net a greater industrial space for Amazon, but I would think there would be some sort of new retail model,” he said. “There could be something else down the pipeline, perhaps a new form of retail.”
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Read the MailMyPrescriptions.com (Boca Raton, FL) press release:
MailMyPrescriptions.com Among Second-Stage Businesses Competing to Earn Prestigious Honor
BOCA RATON, Fla., Aug. 20, 2018 /PRNewswire-PRWeb/ — MailMyPrescriptions.com was among the first round of 2018 Florida Companies to Watch finalists recently announced by GrowFL. The awards event – now in its eighth year – honors 50 select second-stage companies from throughout the state for developing valuable products and services, creating quality jobs, enriching communities, and broadening new industries throughout Florida. Chosen from a candidate pool of 134 growing second-stage businesses, the finalists collectively represented $518 million in annual revenue and employed 2,743 full-time equivalent employees in 2017.
“This recognition is a great accomplishment for our company,” says MailMyPrescriptions.com CEO and founder, Santo Leo. “This encourages us to continue our company-wide commitment of providing fair and transparent prescription drug prices, to the millions of Americans who are suffering from rising out of pocket prescription drug costs.”
The Florida Companies To Watch program consists of two rounds of selections. Finalists now advance to the second round, where they will be further evaluated based on their performance in the marketplace, innovative products, services or processes, philanthropy and empowered employees.
“We applaud these first round finalists who have shown how they stand out in their regions as innovative business leaders, going to the next level to grow their companies. They are true rock stars,” says Dr. Tom O’Neal, GrowFL Executive Director.
The Finalists represent a unique group of scalable, high-growth enterprises that are already located within Florida. These high growth enterprises are an important segment of our economy and their numbers have been steadily increasing, which contributed to Florida’s ranking of 24 on the 2018 Kauffman Index of Growth Entrepreneurship. Florida Companies to Watch recognizes the different approach needed to successfully grow and scale a business and celebrates those that are working to achieve this goal.
Developed by the Edward Lowe Foundation, Florida Companies To Watch is a distinguished awards program specifically designed to seek out second-stage businesses from a wide range of industries representing all areas of the state, not just those in major metropolitan areas. In addition to evaluating past growth and projected success, applicant companies are judged according to their special strengths and impact in their markets, communities and within the state – thus deeming them “worth watching.”
The winners will be announced in MID-September. The 2018 honorees will be celebrated at the awards ceremony February 9th at the Straz Center for the Performing Arts in Tampa, FL.
For more information visit https://www.growfl.com/flctw18/.
MailMyPrescriptions.com® is America’s first wholesale pharmacy, serving thousands of customers nationally since dispensing its first “wholesale-priced” prescription in 2017. The company guarantees low cash-pay prices on over 1,400 FDA-Approved generic drugs from its licensed US mail-order pharmacy. In addition, MailMyPrescriptions.com® offers a cash-pay generic price match guarantee. Average customers save over $1,000 annually by switching to MailMyPrescriptions.com® versus paying retail list prices. From obtaining customers’ prescriptions from their physician or current pharmacy to providing clinical care over the phone to shipping directly to customers’ doors, MailMyPrescriptions.com® does all the work. For more information, visit http://www.MailMyPrescriptions.com.
GrowFL was created in 2009 as an economic development program focused on assisting second-stage growth companies prosper in the state of Florida. By providing strategies, resources and support to second-stage companies for next level growth through Strategic Research, Peer Learning and Leadership Development, GrowFL helps companies overcome obstacles to growth and leads them towards prosperity. Based on the philosophy of Economic Gardening® – to grow existing businesses in a community, region or state – GrowFL, the Florida Economic Gardening Institute, is a critical component to the state’s economic development strategy and Florida’sentrepreneurial ecosystem. GrowFL is a statewide economic development organization certified by the National Center for Economic Gardening through the Edward Lowe Foundation. Learn more at http://www.GrowFL.com.
Our first national commercial is launching this week across CNN, FOX NEWS, History Channel, and local FOX, CBS, ABC, NBC, and The CW affiliates. Here is a sneak peek of the first of several new ad spots:
This week we concluded filming across South Florida of multiple new commercials airing throughout 2018 on cable networking including CNN, Fox News, History Channel, and local networks ABC, CBS, NBC, CW and FOX.
This campaign will be the cornerstone of a broader engagement strategy. Each part of the strategy will be announced with rapid succession on a weekly basis following the television launch.
I’ve spent the last two years watching, mesmerized, as countless reporters wrote about “health tech” companies without spotting nuance-issues with the healthcare perspective of the businesses being reported on. I’ve found some recurring trends where the story’s focused on technology or size of the investment, and overlooked patient care – which is what should be the core focus of any healthcare provider.
This phenomenon has prompted us to design a multi-part series where our licensed pharmacy staff answers common pharmacology questions, with one of our pick lines in the background.
Our customers can now follow MailMyPrescriptions.com’s social media (Facebook, Twitter, and Instagram) and get useful clinical information about their own pharmacology experiences from the convenience of their feeds, or on our YouTube Channel “Frequently Asked Questions” playlist here.
Yep, we’re letting consumers use their senses (not just their pocketbook) when making a decision on what pharmacy they choose to service their prescriptions through.
What our customers will find unique about MailMyPrescriptions.com is how seriously we take the practice of pharmacy. Here are some examples of how we compare to other alternatives out there:
Example One: A well-funded pharmacy discount drug card start-up had a keg in the background of the shot at their headquarters during a primetime TV spot debuting the service.
Why this matters: With substance abuse on the rise in America we should be doing anything and everything to curtail any form of substance abuse. Mixing drugs and alcohol is a fundamental no-no in pharmacy, and considering the service provides discounts on controlled medications, it would make sense to have some self-awareness.
Example Two: Another, dispensing Pharmacy competitor doesn’t require its pharmacy staff to wear scrubs, and uses unlicensed pharmacy technicians in their process to keep costs down.
Why this matters: Customers should know where the pharmacy starts and stops. Making pharmacy easy and affordable shouldn’t invoke eliminating the nuances of practicing healthcare. Healthcare should be clean and safe. If your lawyer showed up to court in a tracksuit… would you be worried? If you’re in a fast-paced environment you don’t want your staff wearing baggy clothing that can get caught in any high-speed equipment. It’s about safety and professionalism.
Example Three: A popular, well-funded, mail-order pharmacy start-up opens pharmacy’s that invoke a “Brooklyn VC Renaissance” office design in old industrial buildings.
Why this matters: It’s cool to be hip and trendy, but, it’s even cooler to be low cost, high output, and high accuracy. Customers don’t care about design awards. They care about speed to delivery, accurate fulfillment, and affordability. We invoked the Amazon Fulfillment Center design characteristics when we built MailMyPrescriptions.com in order to give our customers a “prime” experience.
Example Four: Pharmacy’s and discount cards posting images on social media of computer screens and paperwork in their office. This one transcends pharmacy, almost monthly some big wig gets shellacked because something confidential on their desk, like a password on a post-it note, was on a photo posted on social media.
Why this matters: HIPAA. Period. If a customer sees their pharmacy doing this, it should be cause for caution. All public photos should have black screens, and no paper in them, period.
The big picture
One would think these novel ideas would come as no-brainers. But, with everyone striving for uniqueness to garner media attention, they forget that in some businesses: boring is better.
The MailMyPrescriptions.com difference
You see, at MailMyPrescriptions.com we only employ licensed pharmacy technicians and pharmacists. The customer will ONLY interact with this staff regarding their healthcare. If a customer asks even myself for a price quote, I’m going to hand that off to one of our highly trained, skilled, licensed professionals. Because that’s the process. We don’t deviate. It’s boring, but it’s the best process.
Furthermore, our licensed staff are clearly identifiable. They are in Branded scrubs. They know they do a benevolent job. Outside of work, they are brand ambassadors, and inside of our facility they are “savings specialists”. Whether they are on the phone with a patient, a doctors office, or operating a robot… they are performing an action that has resulted in savings for a customer.
You don’t send a football player on the field in tennis shoes. They wear cleats. There is a reason: performance. At MailMyPrescriptions.com we take our job seriously. That’s our Modus Operandi. We play to win. We dress the part.
And we play in a state-of-the-art facility. 12.500 sq. ft. of specially designed contact center space, and 12,500 sq. ft. Of specially designed robotic dispensing space. It’s a very big, very secure, high-tech licensed pharmacy. The floors are a specially painted concrete, conveyor, there is a tremendous amount of light, there are sterile glove dispensers, and hand sanitizer and hand wash stations available every few dozen feet. Our facility was designed from day one to be able to safely dispense millions of prescriptions at a fast clip.
And to make sure your privacy is protected we do not allow cell phones in work areas. It’s inconvenient for our staff, especially in today’s connected society. But, our team takes our patients privacy serious. That’s why what limited paper that we use is shredded constantly and recycled daily. Speaking of which we clean the facility every day, all day.
And Our recycling and trash? Under lock and key until pickup. We monitor the temperature and have sensors every dozen feet. It’s a bit cold but optimal for drug storage. It’s not what’s best for us – it’s what’s best for our patients.
Have a question?
If you have questions that you’d like our pharmacy staff to answer in our new series, feel free to email me your idea to firstname.lastname@example.org.