Amazon launches own line of OTC drugs

Amazon has launched its own line of over-the-counter (OTC) pharmaceutical products, effectively posing a challenge to pharmacy retail chains. The move is expected to trigger a price war between Amazon and other retailers, with several dips in share prices reported last week on the strength of the news.
The products are produced by US-based manufacturer Perrigo.

In 2017, the private-label OTC medication industry ballooned 31%, reaching $8.4 billion, according to global market research firm Euromonitor International. However, branded products still dominate most categories.

“It’s a very different world, and having Amazon jump in is not a good sign for existing brands, either branded or private label, because the way Amazon works is its ability to take on unprofitable ventures for a time to see how things go,” Matthew Oster, Head of Consumer Health Research at Euromonitor, is reported to have said.

He added that Amazon’s near-monopoly grip in the e-commerce business would allow the company to “undercut price,” saying that that aspect should “be concerning for whoever their competitors are in that space.”

Amazon currently does not currently sell prescription drugs. However, the e-commerce giant has previously expressed interest in the field. Amazon also recently announced its partnership with JP Morgan and Berkshire Hathaway, aiming to make a company that would help reduce health-care costs.