Amazon has been focused on ways to make prescription drugs more affordable for consumers as it works to carve out a piece of the retail pharmacy market.
The online retail giant’s pharmacy arm is now taking aim at easing access to affordable insulin. Amazon Pharmacy will automatically apply drug-manufacturer-sponsored coupons on more than 15 insulin and diabetes care brands during online checkout. With the coupons, many insulin brands are available to eligible customers starting at $35 a month with free delivery and 24/7 access to Amazon’s team of pharmacists, the company announced in a blog post posted Tuesday morning.
The automatic coupons apply to commonly prescribed products from Novo Nordisk, Eli Lilly, Sanofi, Dexcom and Insulet, like insulin vials, pens, continuous glucose monitors and pumps.
About 1 in 10 Americans have diabetes, and approximately 8 million use insulin to help manage their condition, according to data from the Centers from the Disease Control and Prevention. Insulin can be costly and is a financial burden for many patients. According to a 2022 survey, 14% of people who use insulin in the U.S. face what is described as a “catastrophic” level of spending on insulin, meaning they spent at least 40% of their post-subsistence income—what is available after paying for food and housing—on insulin.
One in 6 insulin users rationed insulin due to costs, according to a KFF study.
“Access to affordable diabetes medications and technology can help people living with diabetes stay healthy and avoid complications. Sadly, some of the more than 37 million Americans living with diabetes can’t afford the treatments they need to survive,” said Charles “Chuck” Henderson, CEO of the American Diabetes Association (ADA). “The ADA has been a leading voice in advocating for affordable insulin and diabetes technology. We applaud Amazon Pharmacy for innovating on behalf of patients and taking the important action to help ensure people living with diabetes can easily access the treatments they need through a transparent purchase process that automatically applies any eligible discounts.”
Coupons for medications are not new, but finding and redeeming them isn’t always easy. To reduce out-of-pocket costs, some drug manufacturers offer coupons for their brand-name medications. But these discounts and coupons can be hard to find and often require clipping, clicking and downloading. Consumers often face a tedious process that involves searching online, downloading forms, enrolling in a program or having to call the drug manufacturer directly. One study found patients only used manufacturer-sponsored coupons 15% of the time they were available to them.
In March, during the ViVE conference, Amazon Pharmacy announced it was rolling out a new feature to automatically apply drug-manufacturer-sponsored coupons directly when consumers order brand-name medications through the online pharmacy. The company initially worked with GSK, Kaléo, Novo Nordisk and Dexcom to integrate coupons for their branded medications—including Trelegy, AUVI-Q, Wegovy and G6/G7 sensors and transmitters, respectively—directly into the checkout experience on its website and app.
The lack of upfront pricing in pharmacy is a pain point for customers that Amazon Pharmacy can help solve, said John Love, vice president of Amazon Pharmacy, in the blog post.
“Similar to how customers shop for the items they need on Amazon, we’re making it simpler to get critical medications. We’re thrilled to be able to help customers better find and afford their insulin,” Love said.
If a coupon can be used with insurance, it will be applied and reduce a patient’s final copay price, Amazon executives said. Coupons are available for brand-name therapies to help treat asthma, emphysema, obesity and other common conditions through Amazon Pharmacy.
Coupons cannot be applied in addition to RxPass or the Prime prescription savings benefit, the company said. Patients who are eligible to receive benefits from any state or federal healthcare program, such as Medicare, Medicaid or Medicare Part D, cannot use manufacturer-sponsored coupons, according to Amazon.
Amazon Pharmacy’s latest move to open up access to affordable insulin comes as the three dominant insulin manufacturers—Eli Lilly, Novo Nordisk and Sanofi—drastically lowered list prices and out-of-pocket costs for various products back in March. In a span of less than three weeks, Eli Lilly, Novo Nordisk and Sanofi—in that order—have announced price cuts to some of their insulins in the U.S., answering calls to do so from President Joe Biden and Sen. Bernie Sanders, I-Vermont, Fierce Pharma reported.
The price caps come amid mounting political pressure for price reform.
Leading manufacturers have increased prices by more than 600% over the last 20 years.
In January, the federal government implemented $35 caps on monthly out-of-pocket insulin costs for certain Medicare enrollees as part of the Biden administration’s Inflation Reduction Act.
To date, 22 states and the District of Columbia have capped co-payments on insulin, devices or diabetes supplies for state-regulated health insurance plans.
Vin Gupta, M.D., chief medical officer of Amazon Pharmacy, said automatically applying coupons allows patients to better access medications that are effective and affordable, and “this combination can improve adherence and support better care.”
Amazon shook up the retail drugstore market when it acquired PillPack in 2018 and then again when it rolled out Amazon Pharmacy in 2020. The online retail giant has been rapidly expanding its reach in the healthcare space, most notably with its recent acquisition of One Medical for $3.9 billion.
In August, Amazon rolled out a new virtual medical clinic, Amazon Clinic, that aims to treat common conditions like allergies, hair loss and skin conditions. Recently, Amazon expanded the medical clinic service to all 50 states, including nationwide telehealth services to offer access to clinicians through its website and mobile app.
In January, Amazon unveiled a prescription drug subscription for Prime members called RxPass that ships generic medications to customers’ homes for a flat monthly fee of $5. Along with the new subscription service, Amazon Pharmacy also offers a Prime prescription savings benefit for discounts up to 80% off generic and 40% off brand-name medications at more than 60,000 participating pharmacies.
Competition in the pharmacy space is heating up as online pharmacies that offer price transparency and mail-order services are putting pressure on brick-and-mortar retail pharmacies. Mark Cuban Cost Plus Drug Company launched an online pharmacy earlier this year aiming to disrupt skyrocketing prescription drug prices in the U.S. It currently offers approximately 350 unique generic prescription drugs that it says reflect manufacturer prices plus a 15% fee.