Median prices for over-the-counter, private-brand medicine sold by Walgreens and CVS are about 20 percent higher than Basic Care, the over-the-counter drug line sold exclusively by Amazon.
As pharmacy chains await Amazon’s entry into the prescription-drug market, the online retail giant is already undercutting them for nonprescription medicine for aches, colds and allergies.
Median prices for over-the-counter, private-brand medicine sold by Walgreens and CVS were about 20 percent higher than Basic Care, the over-the-counter drug line sold exclusively by Amazon, according to a report Friday by Jefferies Group analysts.
Last week, Amazon announced that it was buying PillPack, a pharmacy company that will give it entry into the U.S.’s $328.6 billion market for prescription drugs. Shares of CVS and Walgreens plunged as investors bet Amazon could lure pharmacy customers with lower prices, and give them one less reason to go to the corner drugstore.
Amazon began selling the Basic Care line in August with roughly 35 products and has since expanded to 65 drugs, according to Jefferies. The products include mild painkillers, cold and flu medication, sleeping aids and other medication commonly found in the pharmacy aisle.
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According to the Jefferies report, 84 percent of Walgreens’ and 72 percent of CVS’ house-brand drugs were more expensive than the Basic Care line.
In-house brands are a way for retailers to sell over-the-counter products that can compete with manufacturers’ brand offerings. Amazon’s Basic Care brand is made by Perrigo, which also makes in-house brands for other retailers.
Walgreens and CVS didn’t respond to requests for comment. Amazon declined to say how Basic Care brands were performing financially.