Financial

Providers expect Amazon to lower medical supply prices

By Alex Kacik – May 14, 2018

Providers welcome a disruptor like Amazon to shake up the medical supply space, and most think the giant e-tailer will deliver lower prices, according to a new survey.

Some 62% of 152 CEOs, materials managers, operations directors and other executives said they support Amazon’s growing presence in the medical supply sector, according to a Reaction Data survey. Nearly the same amount said the company could deliver medical supplies faster and at a lower price than current medical supply companies.

“It’s clear that providers would want someone like Amazon who could come in and do things differently,” said Mark Wagner, global vice president of Reaction Data.

Amazon has been adding to its Amazon Business platform, which eclipsed more than 85,000 sellers and 1 million customers last year. The 3-year-old service also recently rolled out a Business Prime membership that provides free two-day shipping, similar to its consumer-oriented program.

The platform offers unique pricing and quantity discounts on more than 5 million products ranging from syringes, microscopes, infusion pumps, catheters, IV bags, sutures and forceps to larger items like hospital beds. Large organizations can integrate Amazon Business into their purchasing systems and directly transfer data to streamline processing.

But it remains to be seen whether Amazon will expand beyond commodities and target more specialized medical devices and equipment that physicians prefer. About half of the survey respondents said Amazon should stick to commodity items while 9% said it should focus on surgical, 8% on pharmaceuticals and 8% on IV solutions.

Brandi Greenberg, a managing director with the Advisory Board Co., said Amazon should serve as a wake-up call to suppliers.

“Amazon’s efforts here will almost certainly accelerate price pressure on suppliers, while also threatening to ‘unbundle’ items that historically have been grouped together through GPO or distributor arrangements,” Greenberg said.

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Josh Sandberg

Josh Sandberg is the President of Ortho Sales Partners and Partner for The De Angelis Group. He also serves as Co-Founder and Editor of OrthoSpineNews.

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