Amazon breaks into drug sales with Perrigo’s store-brand OTC medications

  • August 23, 2018

Amazon rolled out a line of consumer health products, called Basic Care, in August 2017, CNBC reported.  The portfolio — consisting of 60 Perrigo-made treatments — sets Amazon up to put the squeeze on retailers of OTC therapies, giving the Dublin drug-maker a boost in the process.

Basic Care does not directly set Amazon up to begin selling prescription drugs, an Amazon spokeswoman told CNBC.  However, the company last month made its ambitions clearer with the announcement of a venture, in conjunction with JPMorgan and Berkshire Hathaway, to tamp down skyrocketing drug costs.

Amazon already sells branded OTC products on its site, including those from Perrigo’s GoodSense brand, the news service noted.  However, with Basic Care, Amazon can undercut its competition to reap just a hair in the profit margin column — something it is got plenty of practice doing.

Of course, just because Amazon’s got the lowest prices does not mean consumers will consistently order the Perrigo brands online instead of running out to a Walgreens or CVS when they need something.  Recently departed Perrigo CEO John Hendrickson made that clear to investors last November when he downplayed the potential for a major disruption from a company like Amazon.  “When you want to cure a migraine headache or do something and you go to your pantry and it’s not there, you run to the store and get it.  It’s sort of a ‘used as needed,’” he said.

However Perrigo, which is looking for a turnaround under new CE Uwe Röhrhoffafter quite the rocky stretch, will take all the sales it can get.  The Dublin drug maker is in the midst of a major restructuring — which it took on after a run-in with activist investors — and it is also involved in an industry-wide federal investigation into generic drug pricing.

REFERENCE:  Fierce Pharma; 21 FEB 2018; Carly Helfand

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