My mother lives by herself in a large regional city in NSW. At 90 she is pretty remarkable, although some of the bits are wearing out, so she has a pharmacological regime that would make your average teenage party-goer green with envy.
Her pills are made up from the actives by a local chemist with the compounding License that allows him to assemble her prescriptions and combine them, which he then delivers weekly in a pack that reflects the changing nature of the prescriptions written by her doctor.
A great service, and the young entrepreneurial pharmacist has the geriatric market in the town sewn up.
I was thinking of him last week when I saw that Amazon had bought US startup Pillpack for almost a billion dollars. As a result, the share prices of listed pharmacy retailers, Walgreens and others fell into a hole, a now common outcome when Amazon comes around.
Jeff Bezos has long signaled his interest in the pharmacy market, being a part of Drugstore.com in the 90’s which was eventually bought by drug store chain Walgreens for $400 million, and closed down. He has made other investments in various areas of the health industry over a long period, which should have provided an early warning alarm to the incumbents. More recently he has launched a venture in collaboration with Berkshire Hathaway and JP Morgan to disrupt the huge but cosey health insurance market.
I can only wonder at the hand wringing going on in the Walgreens board room. They had a decade to build a moat around their business, but failed to do so, and now the pirate has returned. This is exactly the same mistake Blockbuster made a couple of years later, by dismissing the overtures of Netflicks, and disappeared as a result. By contrast, the young pharmacist in Armidale will be well insulated, and I suspect will have his own plans to keep his business thriving. Meanwhile I suspect the Pharmacy Guild in Australia will again tread the road of trying to use the regulations as a protective mechanism, and try to fight the tide of change, which is ultimately going to fail.
As I have noted before, love him or hate him, Jeff Bezos is changing the world, perhaps like none before him. The incumbent public and private institutions of our democratic western economy simply seem unable to accommodate the inevitability of the changes and their impact, and show no sign of being able to evolve sufficiently to do so. The assault on the pharmacy market is simply another example of the speed and certainty of change, which without sufficient ‘strategic intelligence’ being applied, will be the end for status quo driven incumbents.
When you need some of that rare strategic intelligence, more focused than is demonstrated in these pages, call me.
