Amazon reported $3.6 billion in profit for the first quarter of 2019, more than double the $1.6 billion earned during the same time period last year, releasing its quarterly report during the same week it began actively marketing PillPack to its customers.
Customers reportedly received emails that read, "Meet PillPack, a new member of the Amazon family. Your medication sorted by the dose and delivered every month. Our service and shipping are free – you only pay for your medication."
Prescription deliveries are included in Amazon's Prime membership program.
On Thursday, CFO Brian Olsavsky touted Prime's one-day delivery service, evolving from a two-day shipping program.
Amazon is expanding the number of Zip codes eligible for one-day shipping, Olsavsky said. The one-day free shipping offer is the best deal in retail, he said.
"We saw more people sign up for Prime in 2018 than in any year before," Olsavsky said.
Amazon has seen good order trends month to date, he said. The company has built its Q2 range around what it's seen.
WHY THIS MATTERS
Amazon is a disruptor in healthcare.
The online pharmacy PillPack competes with major pharmacies including CVS Health, which is owned by Aetna. The connection between insurers and pharmacy benefit managers includes Express Scripts, which is owned by Cigna; OptumRx and UnitedHealth Group; and Anthem's IngenioRx.
Amazon also competes with Walmart. Last year it began offering a Prime membership discount to Medicaid beneficiaries. The online giant bought PillPack last June for just under $1 billion, reportedly beating out Walmart.
Around the same time, Haven - the nonprofit healthcare company formed by Amazon, Berkshire-Hathaway and JPMorgan Chase, announced Atul Gawande as its CEO. While little has been released about the Boston-based company, Haven has the expectation of doing a more efficient job of delivering and paying for healthcare for its one million-plus combined employees than is currently happening.
Amazon recently unveiled a HIPAA-compliant Alexa assistant to track prescriptions and personal healthcare information.
Amazon's net sales for the first quarter ending March 31 increased 17 percent to $59.7 billion, compared with $51 billion the year before.
Operating income increased to $4.4 billion in the first quarter, compared with operating income of $1.9 billion in the first quarter of 2018. Net income increased to $3.6 billion in the first quarter compared to net income of $1.6 billion, in first quarter 2018.
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