Layer 1

Legal view: The possible next steps for Amazon Pharmacy

"Amazon’s trademark applications cover a wide range of pharmacy products and services"

The form-filling for Amazon to enter the online pharmacy market is not insurmountable, say legal experts Noel Wardle and Peter Byrd

In an interesting and perhaps concerning development for the community pharmacy sector, Amazon applied for trademarks in the UK and EU for “Amazon Pharmacy” in January.

Having a trademark gives the owner a monopoly right to prevent third parties from using that name, in respect of the products and services that the former protects. While you don’t need to have a trademark to operate, it is a very powerful tool in a company’s brand protection arsenal.

In the pharmaceutical industry in particular, trademarks are extremely important. Trademarks are the most effective tool for stopping and seizing products that have been imported and/or repackaged – including medicines manufactured abroad that do not necessarily have approval for use in the UK.

The publication of Amazon’s trademarks in a government journal means that it has been accepted by the UK and EU trademark offices, and third parties now have the opportunity to object.

While there may be many objections from a healthcare perspective, challenges from a trademark perspective can only really relate to the name itself. Given the prominent use of the house brand “Amazon” and the descriptive term “pharmacy”, Amazon Pharmacy might not really be challengeable.

Perhaps the most interesting thing about the Amazon applications is simply that they have been made. In the UK you need to declare a bona fide intention to use your trademark when you make an application, which means that Amazon clearly has designs on the online pharmacy industry.

Amazon’s trademark applications cover a very wide range of products and services including pharmaceutical products and apparatus, retail services relating to pharmaceuticals, and services relating to the dispensing of medicines and medical advice and information.

The applications follow the news in 2018 that Amazon acquired the US online pharmacy PillPack, which markets itself as a full-service pharmacy. The company has also filed for trademarks in countries including Canada, Brazil, the US, Turkey, Australia and Israel – indicating that it has global ambitions for the Amazon Pharmacy brand.

It is, of course, lawful in the UK for medicines to be supplied through online pharmacies both within the NHS and privately. General sale list (GSL) medicines can be supplied by any retailer.

However, using the word “pharmacy” for a business selling pharmacy-only medicines (POMs) or prescription-only medicines directly by Amazon would require it to register a pharmacy. The position varies across the EU, however, with some countries adopting the UK’s fairly liberal stance, other countries effectively banning online sales and some finding a position in between.

If Amazon was planning to operate its own pharmacy in England, it would need to apply for inclusion in NHS England’s pharmaceutical list of pharmacies – assuming it wanted to provide NHS services.

At the moment, it is relatively straightforward to obtain a pharmacy contract to provide distance-selling services in England. The applicant must explain how it will provide services safely and effectively to patients throughout the country, something that Amazon would be in a position to do.

Amazon would need to register with the Medicines and Healthcare products Regulatory Agency (MHRA) for the EU common logo scheme, at least until the end of this year when the Brexit transition period ends.

It would also have to follow the General Pharmaceutical Council (GPhC)’s guidance for remote services. If it intended to offer an online prescribing portal as well as supplying medicines, it may need to register that service with the Care Quality Commission

So, Amazon could have a lot of form-filling and planning to do before it enters the UK pharmacy sector, but none of that would be insurmountable.

No one in community pharmacy in England will forget the letter from the Department of Health and Social Care (DH) to the Pharmaceutical Services Negotiating Committee (PSNC) in December 2015 announcing swinging cuts to the pharmacy budget.

Chief pharmaceutical officer for England Keith Ridge and then DH director general for innovation, growth and technology Dr Will Cavendish wrote: “The DH will also consult on how best to drive new models of ordering prescriptions and collecting dispensed medicines.

The online journey for patients remains slow and awkward and we want patients to be offered more choice about how they access their medicines and advice. In future, patients should be able to choose to order their prescriptions online and have them delivered to their home if they wish, or to ‘click and collect’ if they prefer.”

While online pharmacies are not a new concept in the UK and have their supporters and detractors, it is unlikely that any of the market incumbents will have the resources of a company such as Amazon.

It is now over four and a half years since Keith Ridge wrote his letter. If Amazon is planning to launch its own online pharmacy, might the DH get its wish, and what will that mean for community pharmacies?

Peter Byrd is an associate specialising in intellectual property law at Charles Russell Speechlys, where Noel Wardle is a partner and heads the healthcare regulation group

7 Comments

Kevin Murphy, Superintendent Pharmacist

It has always been a case of "when not if" they enter the market, they are probably already in aquisition talks with P2U/Pilltime or similar. Change is upon us and debating whether it's Amazon or someone else is a distraction. 

No point in being all doom & gloom about it, change is inevitabe. The question is do existing operators accept inevitable demise or adapt their business to give Amazon a good run for their money. There are a lot of things that community based pharmacies can do that an online provider cannot. If we do those face to face things well and up our game at the stuff Amazon excel at (logisitcs, online user journey, convenience etc) then they will struggle. 

We have started that process in our own group with developement of automated Rx collection (MedPoint) which can be at the pharmacy or elsewhere to offer convenience and access. A decent website/App as a digital front door for your pharmacy are also important (working on it!). 

Ultimately there will be an equilibrium reached just like in the book trade where Amazon and WHSmith etc co-exist as customers want both. There will be a lot less pharmacies though, survival of the fittest, which isn't always fair.  

Unfortunatley we as pharmacies don't have a right to exist, I am quite a few years away from retirement so I guess we have no choice but to fight for that right!

Adapt or die. 

Greatly Pedantic and Highly Clueless, Senior Management

As Jeff Bezos famously said "Your margin is my opportunity." With medicines supply in the UK there is next to no margin so good luck with that one Jeff!

Jeff's only hope is that he sets up an online pharmacy and runs it at a massive loss to gain a large market share and then plays hard ball with the DoH to increase margin. I have to feel sorry for small community pharmacies that provide a decent service for the most vunerable in society. Perhaps they could join up with Jeff and do what many small specialist book sellers did and trade across Amazon's platform. Then again, that would require leadership and forward thinking which is thin on the ground.

The pharmacy wholesalers, pharma and multiples should be worried, which have done the the profession no favours, so if Jeff goes after them I wouldn't require any zopiclone. 

Clive Hodgson, Community pharmacist

Amazon is now clearly making preparations to enter the market by their recent trading name registrations. When or how we don’t know. They do have a very impressive track record of being innovative disruptors of established markets. They have also shown that they are willing to absorb considerable initial trading losses to secure a future dominant position.

Should they enter the online prescription business they already have a solid base with established, highly efficient, logistics and distribution systems. They already have a connection with millions of UK citizens so promotion will be cheap and easy. This is significant and will likely result in a very profitable online medicine supply role that would rapidly take business away from bricks and mortar CP. They are already in position to supply some medicines and traditionally CP products (toiletries, cosmetics etc). There will be a very advantageous symbiotic relation for Amazon between prescription supply and their huge range of other products and services.

The Covid19 situation I believe could be a powerful catalyst for this move. Overnight it has effectively killed off paper prescriptions in favour of electronic prescriptions that can be transmitted to and dispensed anywhere. Isolating patients now are having their prescriptions delivered. More patients are taking to ordering online as the GP surgeries lock their doors. 

My thought is that the traditional physical link or bond between patient and CP is now being eroded with patients becoming accustomed to the fact that there is no need to visit a CP to obtain their monthly medication. 

If they do enter the medicine supply role it will have a profound effect.

 

A.S. Singh, Community pharmacist

I highly doubt a stack of paperwork is going to stop Amazon.

Pharmacy is effectively finished if Amazon come in. Only the NHS market entry is standing between them and changing pharmacy landscape overnight.

 

There is absolutely no need for amazon to have a pharmacy contract from the NHS point of view.

Initially patients may not switch over out of loyalty but when there is a blank cheque funding the supply of medication there is no company in the world that can stop them. 

This profession is doomed if this happens. We can only pray Market Entry deny them. Fat chance of that though

C A, Community pharmacist

"In future, patients should be able to choose to order their prescriptions online and have them delivered to their home if they wish, or to ‘click and collect’ if they prefer" - Are those Keith Ridge's wise words or Will Cavendish's?

Also who at the DoH has done a costing on all this delivery and 'click and collect'?

Leon The Apothecary, Student

I was reading up on the history of Amazon. Specifically, their tactics to penetrate into marketplaces to gain market share. From my understanding, Amazon undercut to such an extreme degree through loss-leading strategies that make no-one able to compete.

Much like Thanos, and in a similar fashion, it is inevitable what is going to happen.

N O, Pharmaceutical Adviser

""what will that mean for community pharmacies?""

Simply put -- CLOSURE

and ""what will that mean for Patients?""

More Chaos.

Job of the week

Pharmacist (qualified Independent Prescriber)
London (Central), London (Greater)
Annual salary to start at £52,000 based on a 40 hour week.