Amazon Tests Physical Pharmacy at the Point of Care

Amazon’s latest move to install prescription kiosks inside select One Medical locations marks a subtle but significant shift in the company’s healthcare delivery strategy. By introducing its first in-person medication pickup option, targeting Los Angeles patients with common prescriptions like antibiotics and blood pressure medications, Amazon Pharmacy is testing the limits of vertical integration in care delivery.

The significance of this rollout lies less in the immediate utility of kiosks and more in what it signals: Amazon is now building a physical health logistics network designed to compress the distance between care encounters and medication access, bypassing traditional pharmacy intermediaries in the process.

From National Delivery to Local Dispensing

Since acquiring PillPack in 2018, Amazon’s pharmacy ambitions have largely focused on home delivery. While the platform offers convenience and price transparency, it has not yet displaced brick-and-mortar pharmacies for patients who need immediate access to common medications. This latest pilot introduces a new fulfillment model, one that inserts medication access directly into the clinical environment.

By colocating kiosks with One Medical providers, Amazon blurs the line between prescribing and dispensing. For chronic care patients or those seeking urgent treatment, the ability to fill a prescription on-site may reduce delays, abandonment, or the need for secondary stops. It also reflects a broader industry trend toward integrating pharmacy services into primary care workflows, a model that has been explored by health systems and retail clinics alike.

A 2023 Health Affairs analysis noted that point-of-care pharmacy access can improve first-fill rates and adherence for time-sensitive therapies. But success requires inventory alignment, workflow integration, and seamless pharmacist consultation. Amazon’s approach appears to address these with tailored kiosk inventories and virtual pharmacist access, preserving regulatory oversight without staffing on-site personnel.

Kiosks as Supply Chain Strategy

This announcement also underscores Amazon’s longstanding fixation on logistics. The company has already reorganized its retail delivery infrastructure around regional hubs, and healthcare is no exception. By placing medications closer to patients, Amazon lowers last-mile costs while improving fulfillment speed, a dual advantage with both operational and financial relevance.

Indeed, during a recent earnings call, Amazon CFO Brian Olsavsky emphasized that the company is “committed to initiatives that further improve our cost structure.” Pharmacy fulfillment, particularly for generics and maintenance medications, fits neatly into that framework. As Reuters reported, Amazon does not plan to dispense refrigerated or highly regulated drugs through kiosks, focusing instead on high-volume prescriptions with predictable demand curves.

That decision is about margin protection. Medications requiring cold storage or complex chain-of-custody procedures introduce risk and compliance overhead that would erode the cost efficiency Amazon is seeking to capture. By narrowing the scope of kiosk fulfillment, the company can focus on automating the most scalable segment of its pharmacy operation.

One Medical as Infrastructure, Not Just Brand

The deployment of pharmacy kiosks also repositions One Medical from a standalone care brand to a logistical asset. Acquired in 2023, the membership-based primary care network offers Amazon a physical presence in dozens of urban markets. Embedding pharmacy services in these locations allows Amazon to transform real estate that was once just a patient access point into a multi-use healthcare node.

This model mirrors retail health experiments attempted by CVS Health and Walgreens Boots Alliance, but with key differences. Unlike traditional pharmacy chains retrofitting care delivery into existing stores, Amazon is building the opposite: placing pharmacy infrastructure inside clinical care environments it already controls. The potential implications for data integration, customer retention, and care continuity are significant.

Moreover, Amazon’s ability to pilot new service models within its owned ecosystem allows for tighter experimentation. If kiosk performance in Los Angeles meets thresholds for cost savings and patient uptake, the company can expand quickly—first to other One Medical markets, then potentially through external partnerships. Early reports confirm that Amazon is already in talks with health systems about deploying kiosks beyond its own network in 2026.

Reframing Retail Healthcare Strategy

While much of the attention surrounding Amazon’s healthcare strategy has focused on its scale, this announcement highlights a more surgical approach. By selectively targeting common prescriptions, colocating dispensing services with existing care infrastructure, and limiting initial deployment to owned clinics, Amazon is testing not only operational feasibility but also consumer behavior and system interoperability.

This approach reflects a growing recognition across the industry that convenience alone is no longer a sufficient differentiator in healthcare. As patients seek integrated experiences and providers look to close care gaps, the ability to connect diagnosis, decision, and delivery in a single setting becomes a strategic advantage.

For other players in the healthcare supply chain, particularly retail pharmacies and health systems with outpatient clinics, Amazon’s kiosk model presents both a challenge and an opportunity. It challenges incumbents to reevaluate the efficiency and user experience of their own fulfillment models. But it also offers a potential playbook for integrating dispensing into clinical workflows without requiring high-cost staffing or inventory expansion.

Implications for Payers and Regulators

The long-term impact of Amazon’s pharmacy kiosk initiative will depend in part on how payers and regulators respond. If private insurers see improvements in medication adherence and reduced total cost of care, they may be incentivized to include kiosk-dispensed medications in preferred networks or value-based arrangements. On the other hand, state pharmacy boards and federal oversight bodies will need to assess the model’s compliance with existing rules on dispensing authority, storage, and patient counseling.

For now, Amazon appears to be operating within those boundaries, emphasizing virtual pharmacist access and excluding controlled substances. But if kiosk use expands into more complex medication categories, or if partnerships with third-party health systems accelerate, regulatory scrutiny may follow.

Still, the strategic signal is unmistakable: pharmacy services are no longer an endpoint in the healthcare journey. They are becoming embedded infrastructure, and the companies that control that infrastructure may hold increasing leverage over cost, access, and experience.