Amazon’s health business is coming into focus

In November 2021, Neil Lindsay was named to head Amazon’s health business. It wasn’t because of his medical expertise. He didn’t have any. “The reason I’m in this job is because I know how to build things in Amazon,” says Lindsay, who had spent 11 years at the company in marketing roles relating to Prime, devices, and other areas at the time of his appointment.

At Amazon, maybe even more than other tech giants, proven success at understanding the corporate culture and getting stuff done within that framework is critical. The company cherishes its unique principles and willfully idiosyncratic approach to innovation. Healthcare, a $4.5 trillion business just in the U.S., touches everyone and is rife with unsolved problems, making it a unique opportunity. But even for an outfit as instinctively ambitious as Amazon, figuring out how to make a dent in it hasn’t been easy.

When Lindsay got his job as Senior VP for Amazon Health Services, the company’s best-known foray into healthcare was Haven, a joint venture with JPMorgan Chase and Berkshire Hathaway that aimed to provide better health outcomes for their respective employees at lower costs. After launching with great fanfare—and maybe a certain degree of hubris—the partnership ended up disbanding after less than three years, its mission not even remotely accomplished.

Under Lindsay, Amazon Health has been focused on addressing the needs of an even larger group than Amazon employees: Amazon customers. Two-thirds of U.S. adults are Prime subscribers, according to eMarketer, and their medical issues “kind of mirror what’s going on in the country,” says health tech investor, newsletter author, and Fast Company alumnus Christina Farr. “All the data suggests that we’re all getting older and sicker. And so, if you don’t have healthcare as part of what you offer, it’s going to be a giant gap.”

Lindsay’s major contribution over his first three years as Amazon’s health chief has been to focus the business on achievable goals that play to the company’s strengths. “If you think about core Amazon, what we’ve done over decades is find things that can be a little bit easier and then stack them up to make them a lot easier,” he explains. Ultimately, he defines his job as helping “help people who know a lot more about healthcare than I do find a path to executing the mission and achieving the mission, and to really help them align resources.”

For now, that effort has three major components. There’s Amazon Pharmacy, an online seller of prescription medicine that launched in November 2020. One Medical, the chain of storefront primary care offices that Amazon acquired in 2023 for $3.9 billion, adds a physical footprint. And One Medical Pay-per-visit provides inexpensive virtual care covering areas such as acne, contraception, and UTIs.

Refining how these businesses relate to each other—and Amazon as a whole—has been a work in progress. After buying One Medical, Amazon left the brand largely distinct for a while. Earlier this year, however, the company began labeling it as “Amazon One Medical.” The virtual care service was initially called Amazon Clinic; in May, it got renamed Amazon One Medical Pay-per-visit—a bit of a mouthful, but a clearer linkage to the membership-based One Medical service. TV and podcast ads now promote One Medical and Amazon Pharmacy with a shared tagline—“healthcare just got less painful”—that ties them back to Amazon’s overarching identity by emphasizing convenience.

The company has also built out an Amazon.com health section that features all three services and is reachable from a link occupying premium real estate right below the Amazon logo on the main Amazon site. “If you think about it, we’ve always said that our mission is to make it easy to find, choose, support, and engage with everything you need to get and stay well,” says Lindsay. “The starting point is to make it make it easier to find, to make sure people are aware that Amazon has these services, too.”

At a company as sprawling as Amazon, there are a lot of places that starting point might lead. In April, in Amazon’s annual shareholders’ letter, CEO Andy Jassy described Amazon’s health offerings as “important building blocks” for the whole company, and said they were beginning to help serve greater goals.

“Because of our growing success,” Jassy wrote, “Amazon customers are now asking us to help them with all kinds of wellness and nutrition opportunities—which can be partially unlocked with some of our existing grocery building blocks, including Whole Foods Market or Amazon Fresh.” That certainly hints at further interminglings to come.

As it edges in that direction, Amazon has not shied away from hard decisions relating to its investment in health. In 2022, for example, it shuttered a hybrid telehealth/in-person service called Amazon Care that had grown out of the Haven project. Last February, it cut hundreds of jobs at One Medical and Amazon Pharmacy, one of many waves of layoffs that have recently roiled the tech industry. The company says that the cutbacks don’t represent a scaling back of its commitment to the overall business.

One Medical also received some negative press last June, when Caroline O’Donovan of The Washington Post (owned by Amazon founder Jeff Bezos) reported that a One Medical call center in Tempe, Arizona, had been slow to connect some elderly patients reporting urgent systems with appropriate care. In a response, the company called the report “egregiously misleading and incomplete” and said its data showed 97% satisfaction from callers.

Lindsay is careful not to brag too much about what Amazon Health Services has accomplished so far or overly stoke expectations for what could be. Over the course of two conversations, he reminds me six times that Amazon doesn’t have “a magic wand” that will let it “fix healthcare.” Chipping away at such a complex problem “sort of inspires us, actually,” he says. “If it’s big enough, there’s a need for customer obsession to improve experiences. If it was easy, then it wouldn’t be like this.”

Meds through the mail

Five months after unveiling the Haven project back in 2018, Amazon made another investment in health that was more obviously up its alley by paying $750 million to acquire PillPack. The Boston-based mail-order pharmacy, which used robots to divvy medications into convenient labeled packets, had inspired comparisons to Amazon’s tech-savvy commerce all along (including in this 2014 Fast Company article).

PillPack, which still exists as an Amazon brand, focuses on patients who take multiple meds for chronic conditions. But Lindsay stresses that the idea all along was to use it as a springboard for a larger online pharmacy with a broader customer base—a yen the company first expressed back in 1998 when it invested in a startup called Drugstore.com. “PillPack enabled us to launch Amazon Pharmacy,” he says, citing the licenses and distribution capabilities the startup had assembled.

Even now, almost a quarter of the way into the 21st century, the internet has done only so much to transform how people get prescriptions. Last year, a McKinsey study reported that just 13% of respondents said an online or mail-order pharmacy was their principal source of meds. However, Amazon Pharmacy VP John Love—an 18-year veteran of multiple Amazon businesses whose father once worked at a pharmacy—notes that the typical brick-and-mortar experience hasn’t changed much in decades and leaves plenty of room for improvement.

“You walk in, there’s a counter and somebody behind it in a coat,” he says. “You find out the price of the meds at the point of purchase . . . You’ve got to drive, you’ve got to deal with their hours, you’ve got to wait, potentially. You talk about a private health issue—you know, the pharmacy closest to my house is right next to the hot dogs and the cheese.”

In case you were not aware, Amazon sells hot dogs and cheese, too. But Amazon Pharmacy is walled off from the rest of the e-commerce megasite and, at this point, is fairly basic in presentation. Amazon’s typical sprawling plenitude is not the idea; familiar elements such as customer reviews and recommendations of related products wouldn’t make sense and are therefore absent. A “Pharmacy Assistant” chatbot, currently in beta, can field customer service issues and answer questions such as “Do you dispense Wegovy?” but, in my experience, begs off responding to anything that sounds like a request for medical advice. Actual human pharmacists are available for consultation 24/7 via chat or phone call.

Overall, Amazon Pharmacy’s value proposition—easy ordering, low prices, and speedy delivery—certainly fits into Amazon.com. And beneath the surface, there’s some sophisticated technology in place, such as machine-learning algorithms that estimate insurance prices when Amazon can’t instantly retrieve them.

Even for a company with as much experience at wrangling millions of products and their prices as Amazon, prescription medicine is a unique challenge. Pharmaceutical companies often offer coupons, particularly for generics, but awareness is low: Amazon Pharmacy Chief Medical Officer Vin Gupta cites a 2018 Massachusetts survey that found that even when a coupon was available, respondents took advantage of it only 15% of the time.

Historically, patients “won’t know to download the form off a website,” Gupta says. “It’s a very convoluted, paper-heavy process, both for the provider and the patient. And so, John [Love]’s background at Amazon, Neil [Lindsay]’s background at Amazon, the retail roots of the company, making it as easy as possible for things like paperwork and automating what we can, it’s a big deal for some of these random medications.”

By facilitating access to such discounts, Amazon Pharmacy offers Prime members discounted pricing—80% or more off for generic medicines, and 40% or more for branded ones—that beat insurance pricing in some instances and offer more flexible refill windows. And in January 2023, the company did something truly Amazonian by announcing a new Prime benefit called RxPass. For a flat $5 a month, including shipping, members are covered for over 50 generics, including much-prescribed ones such as amoxicillin, lisinopril, finasteride, and cephalexin. They span 80 different conditions impacting 150 million Americans.

RxPass isn’t completely unprecedented: Arielle Trzcinski, a healthcare analyst at Forrester, points out that Walmart started selling some generic drugs for $4 in 2006. Due to the licensing complexities of operating an online pharmacy, RxPass also remains unavailable in the two most populous states, California and Texas, as well as Washington State. But it’s gone from being available in 42 states to 47 since launch.

To implement the service, Amazon had to pick drugs it could afford to sell for a flat $5 a month. And even then, RxPass “is not a huge margin maker,” says Love. Still, the economics are helped by the kind of efficiencies the company understands. And since the service is a Prime benefit, it caters to the kinds of loyal customers whose overall patronage redounds to Amazon’s overall bottom line. 

RxPass’s flat $5 rate is about more than cutting prices. “It also brings transparency and consistency to the cost of medications,” says Trzcinski, who notes that in a country with as many health problems as the U.S.—40% of the population has hypertension—anything that increases the chances of people taking care of their conditions is an accomplishment. Simply making it clear how much you’re going to pay for their medications matters enough to Amazon Health Services that it recently added “Clarity of Cost” as a pillar of its mission, which already included three other Cs: “Choice,” “Convenience,” and “Continuity of Care.”

By contrast, in the conventional, physical pharmacy experience, the price of a prescription remains a mystery until you pick it up. “That’s when you find out what it costs, unless you happen to already know, because you’ve had it before,” says Lindsay. “Even then it can change. And if you go to a different pharmacy, you might get a different price, because of t