Amazon Pharmacy (AMZN) aims to provide same-day delivery to 4,500 U.S. cities by the end of this year, adding statewide coverage across Idaho and Massachusetts and 2,000 new communities.
The expansion addresses a need for new methods to deliver medications and increases Amazon’s (AMZN) presence in the lucrative pharmaceutical market. The company is going head-to-head with rival Walmart (WMT) in the delivery business while also moving in on traditional pharmacies like CVS (CVS), Walgreens, and Cigna’s Express Scripts (CI) with convenient—and often faster—delivery options.
“Patients shouldn’t have to choose between speed, cost, and convenience when it comes to their medication, regardless of where they live,” said John Love, vice president of Amazon Pharmacy. “By combining our pharmacy expertise with our logistics network, we’re removing critical barriers and helping patients start treatment faster—setting a new standard for accessible, digital-forward pharmacy care.”
Through its extensive delivery network and pharmacy kiosks, Amazon’s pharmacy business is rapidly narrowing the considerable gap with Walmart (WMT), the latter of which holds 4.8% of the pharmacy market thanks to 4,600 in-store pharmacies and delivery options. By comparison, although Amazon (AMZN) is moving aggressively to disrupt the traditional pharmacy market with its expanding delivery options and micro-fulfillment centers, the company still holds just 1% of the ~$700B pharmacy market.