Amazon.com Inc. is pricing its brand of over-the-counter drugs below competing products at retail pharmacies CVS Health Corp. and Walgreens Boots Alliance Inc., according to a July 6 report from Jefferies.
On average, Amazon's prices for pain relievers, topical creams and other products that it sells under its Basic Care label were between 20% and 22% lower than equivalents at CVS and Walgreens, analyst Brian Tanquilut wrote in a July 6 note to clients.
About 72% of CVS' products were priced higher than rival products from Basic Care, while 84% of similar products at Walgreens were priced higher, Tanquilut wrote.
The report's findings come after a similar price comparison between Amazon's personal care products and the retail pharmacies' equivalents in June. That research, also conducted by Jefferies, found that Walgreens' prices for shampoo, skin moisturizers and other products were an average of 13% cheaper than similar products sold under Amazon's Solimo brand. Prices for similar products at CVS, meanwhile, were 11% more expensive than Amazon on average, according to the June 26 report.
Neither CVS nor Walgreens immediately responded to requests for comment on the reports.
Amazon debuted the Basic Care brand in mid-2017. At the time, the selection included about 35 products manufactured by Ireland-based generic drugmaker Perrigo Co. PLC.
About one year later, Amazon offers about 65 products through Basic Care, 30 of which use formulations for generic drugs approved by the U.S. Food and Drug Administration, according to the Jefferies analysis. That number will likely continue to expand, Tanquilut wrote, as Perrigo has FDA approval for a total of 93 generic drug formulations, suggesting that the manufacturer could introduce new over-the-counter medications for Amazon.
Amazon's expansion into over-the-counter drugs is one part of the Seattle-based company's broader push into healthcare. The e-commerce giant said June 28 that it is trying to buy PillPack, which packages and distributes prescription drugs and aims its services at patients on multiple medications.
The company has also widened the selection of medical supplies and devices, and it sells with the aim of making sales to hospitals and other healthcare providers.
CVS and Walgreens, meanwhile, have outlined plans to offer more medical services within their physical stores, which have historically focused on pharmacy and general merchandise sales.
CVS executives said in December 2017 that they plan to expand the range of services within its MinuteClinic locations as part of its proposed $69 billion acquisition of insurer Aetna Inc. Walgreens has shied away from acquisitions so far, opting instead to open more clinics as part of a partnership with insurer Humana Inc.