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Amazon Australia signals pharmacy foray with new trademark application

The local arm of retail giant Amazon has filed a trademark for the term “Amazon Pharmacy”, suggesting it could be looking to enter Australia’s highly regulated pharmaceuticals market.

Submitted to trademark authority IP Australia last Thursday, the submission covers a number of goods and services classes in the pharmacy space, including various medical apparatuses, medication dispensers, online pharmacy retailing and the distribution of prescription medication.

Most notably, the trademark covers a “pharmacy packaging service that aligns, sorts and packages a patient’s medications by date and time into individual packets”.

This is similar to Amazon’s existing pharmacy retail service in the US, which it kicked off last year through a $1.35 billion acquisition of online pharmacy startup PillPack.

PillPack offers pre-sorted medication packages containing individual daily doses, primarily aimed at users who take numerous drugs. The company co-ordinates with doctors and insurers to manage prescriptions, with licensed pharmacists overseeing the process.

Amazon has experienced a slow uptake after it first launched in Australia in late 2017, reporting a loss of $5.3 million after tax on $260 million in revenue for its first full year of operation.

Amazon has not indicated in which markets outside the US it intends to launch pharmacy services. An Amazon Australia spokesperson said it would not comment on the Australian trademark application.

However, a foray into the $38 billion local pharmaceutical sector could be hard going for a new entrant such as Amazon, with Australia having strict rules on who can own pharmacies, and how prescriptions must be processed.

For example, pharmacies in Australia must be owned by a pharmacist, and legislation exists which dictates how close a new store can be to an existing pharmacy.

It’s also unlikely Amazon would be able to significantly undercut drug prices, with the government’s Pharmaceutical Benefits Scheme limiting the amount Australians pay for some medication to $41 or $6.60 for concession card holders.

Pharmacists are only able to discount the price by $1, leaving little wriggle room for the retail giant to offer cheaper rates on prescription medicines as it does for other consumer goods.

Finally, to have medication fulfilled online, customers must currently mail their paper prescriptions to the pharmacy first, though the Department of Health is currently investigating electronic prescription methods.

It’s for these reasons that influential lobby group the Pharmacy Guild has brushed off Amazon’s potential entrance into the market, saying Australians prefer to have their prescriptions filled face to face.

“Australia’s pharmacy network model and regulatory requirements around the supply of prescription medicines has meant most people continue to source their medicines from their local pharmacy where they can get face-to-face advice and assistance,” a spokesperson said.

“Most Australians live within 2.5 km of a local pharmacy, where they can access subsidised medicines immediately – without waiting for a delivery from overseas.”

Other operators have signalled their interest to collaborate with Amazon to provide online services, with the chief executive of pharmaceutical wholesaler Sigma, Mark Hooper, saying in 2018 he would rather work with the retail giant than fight it.

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