The Rise of Mail Order Pharmacies

It’s no secret that brick and mortar pharmacies are struggling to compete in today’s internet driven world. Without the costs associated with maintaining a physical store front, online pharmacies can focus on keeping inventory costs low and moving large amounts of product. That means that consumers can save big when shopping online. How much consumers save by going online is a matter of debate, but not at all related to the real reason that online pharmacies continue to grow:

It’s convenient to shop online.

As consumers become increasingly comfortable buying everyday items online, it’s only natural that they’ll want to fill their prescriptions there too.

The first internet pharmacies date back to around 1999 with Pharmacy2u.co.uk and soma.com (now part of CVS) among the first. In 2000, Canadian company tcds.com saw the demand coming from the US for lower priced drugs from across the border and opened to fulfil that need. By 2003, the Washington Post estimated that more than two million packages of pharmaceuticals from online pharmacies were being received in the US each year.

One of the barriers to the growth of online pharmacies in the past has been the bad reputation illegitimate pharmacies, often operating overseas, have given to the industry. Many consumers fear receiving counterfeit or unsafe drugs when ordering online. However, the entrance of well known brands, such as CVS and Target, into the online marketplace has significantly reduced these fears.

Further improving consumer confidence is the fact that many insurers have started guiding consumers to shop online. The lower costs of online pharmacies saves insurance companies big money over the long term. A few major employers, such as Citigroup, General Motors and Southwest Airlines, have gone as far as to mandate that their employees purchase recurring subscriptions online. Brick and Mortar pharmacists have been fighting these types of mandates for years, with little progress.

Even Amazon has suggested that it would like a piece of this growing industry, making it clear that online pharmacies are here to stay, no matter how much conventional retail outlets would like them to go away.