Amazon Is Out of the Game for Now: Back to Business as Usual?

Last month, CNBC reported that Amazon is backing off plans for large-scale drug distribution and had been struggling to do business with hospitals. Additionally, Amazon has run into some infrastructure and logistical issues around specialized products, such as requiring refrigeration across the distribution infrastructure and special handling requirements—ironic, considering that Amazon is one of the world’s foremost logistics companies. Furthermore, most observers cited regulatory challenges and other barriers to entry that make disruption in the pharmacy sector difficult to achieve with minimal investment or over a short time. However, very few analysts think that Amazon’s retreat is permanent. The lure of a health care sector that exceeds $1 trillion in annual output is just too alluring for a company such as Amazon.

Are We a “Protected Sector” or Are We Vulnerable to Disruption?

Non—health-care-focused companies have spent a lot of time and money attempting to disrupt health care business models. Seemingly inefficient and woeful at improving population-level outcomes, the health care sector, it seems, would be ripe for testing new ways of payment and service delivery. Yet, though pharmacy has produced a number of new models of care over the past 3-plus decades, our business model remains fundamentally the same. We sell drugs to make a living, and those who don’t, teach.

Why haven’t we been disrupted? Machines have been able to fill prescriptions for most of those 30 years, and innovations such as remote order entry and regulatory advances such as pharmacy technicians administering immunizations have evolved alongside the new care models. It seems that we would be more vulnerable than others in health care to being replaced by automation, cheaper labor, and machines.

The Human Touch and Exception Handling

Yet, I read 3 quotes recently that perhaps argue to the contrary. The first spoke directly to the issue of Amazon’s challenges disrupting not only the business of pharmacy but also the nature of the service model:

“Unlike many businesses that Amazon has appropriately automated, there’s always going to be a human pharmacist that has a role both regulatorily as well as consumer preference, because we’re dealing with lifesaving medical issues.” — Larry Robbins, billionaire hedge fund manager

The other came from the Twitter feed (April 13, 2018) of one of the most respected entrepreneurs and industrialists of the 21st century, who is struggling mightily to automate his assembly line to produce electric cars for the masses:

“Yes, excessive automation at Tesla was a mistake. To be precise, my mistake. Humans are underrated.” — Elon Musk, cofounder, chief executive officer, and product architect of Tesla

So, it is back to Henry Ford’s original model with humans on the assembly line for Tesla, at least partially. It turns out that humans are much more adept at “exception handling.” Robotic automation and even state-of-the-art artificial intelligence struggle with judgment and problem solving when there are exceptions to the rule. Anyone who has ever worked on the front lines of a pharmacy knows that those exceptions occur every day with special insurance coverage issues and unique care teams, dispositions, and responses to medications. As an executive at Honda Automotive put it:

“We can’t find anything to take the place of the human touch and human senses like sight, hearing, and smell. We don’t automate for the sake of automating.” — Tom Shoupe, chief operating officer of Honda of North America

Back to Business as Usual, Right?

Not likely. Disruption is well under way, regardless of Amazon’s continued hesitation. It is important to note that the method of medication distribution to the end user continues to evolve and follow trends well under way in the larger retail sector. Closed-door and mail order pharmacies, often repurposed from home infusion, long-term care, physician’s offices, and other non—storefront-pharmacy-based methods of fulfillment and delivery continue to make up part of the pharmacy dispensing pie. However, each of these alternative streams is either defined by or increasingly called upon to focus on the patient, not the product, and produce positive health outcomes.

Maintaining the Human Part of Health Care Is Essential for Our Sustainability

Human interaction, judgment, and relationships—that is the trifecta of sustainability, it would seem, regardless of the care setting or role in the health care system. Even for the most clinical of “clinical pharmacist” activities, human interaction either with patients or other care team members defines the work. Algorithms will prescribe, Amazon will market and deliver, and machines will dispense. Humans still need to identify exceptions and provide an understanding ear.

Embrace the Exceptions—They Are the Differentiators

What can humans do that machines cannot yet do? Display a caring touch, feel emotion…and problem solve beyond algorithms. The next time a patient stops the workflow and asks for help with an OTC drug, embrace it. When a patient wants extra counseling for a child’s asthma, nail it. When given the opportunity discuss why immunizations are safe and so vital to individual and public health, sell it. When a patient cannot understand instructions, explain it. When a care team member asks for help coaching a patient, get excited. When a daughter is unsure what her mother’s medications are used for, educate her. When, at the end of a long day, a frantic patient with an opioid prescription presents 5 minutes before closing time, do not judge but instead be empathetic. It will be decades before a machine can do that. We must leave pharmacist fingerprints on our dispensing and our care team’s health care delivery or there is no need to have fingerprints in the first place. If we do that, I am optimistic that human pharmacists will always be around.

Put another way: “No prints can come from fingers if machines become our hands.” — From the “Horizon Has Been Defeated” by singer-songwriter Jack Johnson

Troy Trygstad, PharmD, PhD, MBA, is vice president of Pharmacy Programs for Community Care of North Carolina, which works collaboratively with more than 1800 medical practices to serve more than 1.6 million Medicaid, Medicare, commercially insured, and uninsured patients. He received his PharmD and MBA degrees from Drake University in Des Moines, Iowa, and a PhD in pharmaceutical outcomes and policy from the University of North Carolina in Chapel Hill. He also serves on the board of directors for the American Pharmacists Association Foundation and the Pharmacy Quality Alliance.

Reference

• LaVito A. Drug distributor and drugstore stocks rally after Amazon shelves plan to sell to hospitals. cnbc.com/2018/04/16/amazon-shelves-plan-to-sell-to-hospitals-drug-distributors-rally.html. Published April 16, 2018. Updated April 16, 2018. Accessed April 30, 2018.