Drug companies are on Team Amazon
Allergan CEO Brent Saunders is interviewed on the floor of the New York Stock Exchange. Photo: Richard Drew / AP
Pharmacies and pharmacy benefit managers are terrified about the prospect of Amazon getting into their business. But pharmaceutical companies are all for it, CNBC reports. "I think the drug distribution channel also should be disrupted with improvements based on technology or efficiency," Allergan CEO Brent Saunders told analysts yesterday, according to CNBC. "It's an area rife with inefficiency and a lot of turf," another pharma CEO said in the report. "It's overly complicated; that's the opportunity."
Between the lines: Drug companies are especially frustrated with pharmacy benefit managers, which function as intermediaries between manufacturers and pharmacies. Pharma companies complain that PBMs mark up their products without disclosing those costs, and cutting into PBMs' slice of the pie is pharma's preferred solution to the controversy over high drug prices.