Amazon.com Inc. quietly launched Basic Care, an exclusive over-the-counter health products line, in August 2017, in a move reportedly aimed at better competing with brick-and-mortar pharmacy chains, CNBC reported Feb. 21.
The OTC products are manufactured by pharmaceutical company Perrigo Co. plc, according to CNBC.
CNBC noted that the exclusive brand will not be subject to the fluctuating prices from competitors, making it possible for Amazon to take really slim profit margins to price items lower than other products. The company declined to give the margins for the Basic Care line, but a spokesperson for the Seattle-based company explained that Amazon tries to offer low prices in all of its selections, according to the report.
The spokesperson reportedly added that the drug line does not give Amazon a passage into offering prescription medication. But CNBC pointed out that the e-commerce giant has held exploratory talks with drug manufacturers.
The report also noted that pharmaceutical companies CVS Health Corp., Walgreens Boots Alliance Inc. and Rite Aid Corp. are considering M&A deals as they prepare for the impact of Amazon's step into healthcare.
While a CVS spokesperson reportedly declined to comment, a Walgreens spokesperson emphasized that the Illinois-based retailer offers trusted brand products.
Meanwhile, grocery chain Albertsons intends to merge with Rite Aid to establish a new company worth about $24 billion.