Amazon announced that it will sell medicine under medical prescription in vending machines from December in the United States. Buying aspirin and ibuprofen just like a snack in one of these machines is not a new thing for Americans. CVS has several of these machines spread in metro stations, parks, airports, and other places with heavy people transit. But in Brazil, buying controlled substances with this level of convenience was unheard of. And the first to take this step was not an established pharmacy but a marketplace that’s been operating for a little more than five years.

Amazon Pharmacy began in 2018 with the acquisition of PillPack, a pioneering American healthtech which sold prescription medicine online. The business grew during the pandemic with the same formula that raised Amazon into big tech status: aggressive discounts, and fast and free deliveries.

In 2022, the company paid 3,5 billion dollars for One Medical, a primary medical care network that operates remotely or in person, and it will be in their clinics that Amazon’s medicine vending machines will be installed.

Amazon Pharmacy’s numbers aren’t public, but an internal document to which the website Business Insider had access showed profits of 3 billion dollars in 2024. Specialists have said that Amazon had the potential to become one of the USA’s biggest pharmacies, if they managed to keep the accelerated expansion pace long term. But the number is still small compared to the annual profits of CVS and Walgreens, which made, each, around 100 billion dollars last year.

A single one of these companies made more than two times all profit made by the whole of Brazilian pharma retail in 2024, when the number surpassed 200 billion… reais. Frequently Brazil is in first place on lists of countries with the most pharmacies: there are 93.700 according to numbers surveyed by the IQVIA consultancy. Laws and sanitation norms in Brazil still make it so that medication sales, either prescription or not, can only be conducted through these establishments.

It is not a new thing, however, for companies in other sectors to try and join this market. So far, Brazilian pharma retailers managed to keep the sector “pure-blooded”. But they feel the disruption knocking on their doors stronger than ever now and they are moving, be it to protect market shares – be it to simply stop new players from joining.

History repeats itself

Mercado Livre is the largest e-commerce in Latin America, and it also works with medicine sales in some acting countries. But unlike Amazon, which works with their own stocks, Meli positions itself as a sales channel for sellers in its marketplace, which in this case are pharmacies.

In the neighboring countries of Chile, Colombia and Argentina, the company is already operating with over the counter (OTC) medicine, which can be acquired without prescriptions. In Mexico, the company is also authorized to sell prescription medicine. But something of the sort was missing in Brazil, its main market.

Here, Meli can’t replicate their operation in the same way, because of regulations. The crux of the problem is a resolution from the National Health Surveillance Agency (Anvisa), RDC 44. It prohibits the online sale of medications by pharmacies or drugstores not authorized and licensed by competent authorities. In short: the medication cannot originate from a Mercado Livre distribution center.

“We are having talks with public policy providers to update regulations and allow us to operate in a marketplace model”, said Fernando Yunes, senior vice-president of Mercado Livre and responsible for Brazilian operations, in a recent press conference. Reached out by EXAME, Anvisa has informed that “the process of revision of RDC 44 is still in the workings”.

The solution Meli found to start exploring this market was purchasing a pharmacy in the southern São Paulo city, thus far owned by the healthtech Memed. In possession of a licensed establishment, open to the public and with standby specialists, Meli wants to pilot operations in the state’s capital city. “It is indeed possible, especially with our own stocks. We will now have every necessary pharmaceutical license”, explains Adriana Cardinali, the company’s judicial director.

Ready for a counterattack

Despite the extensive number of pharmacies in Brazil, the economic power of pharma retail is concentrated in a select group of big networks. The associates of the Brazilian Association of Pharmacies (Abrafarma) moved over 103 billion reais last year, pretty much half the profits of the entire sector, with less than 12.000 establishments.

“An Abrafarma store makes 10 million reais a year, while a typical pharmacy makes 700.000”, says Sérgio Mena Barreto, the association’s CEO. Even though the entity represents some of the main opposition to the entrance of Mercado Livre in the segment, seeing verticalization risks, the executive says that pharma retail fears no such disruptions.

“New players will find a sector in which stores transformed themselves into tiny distribution centers to overcome inefficacies and have mobile system integration on a totally fluid physical space”, says Mena. “We have a high level of predictability of production and supply.”

To each their weapons

Panvel, from southern Brazil, claims for itself a certain amount of pioneering in online medication sales with fast deliveries, a practiced its had since before the pandemic. “We have always understood this as a competitive differential in a world in which the habit of online purchasing will only grow, and not get smaller, even if wethink the role of the physical store will remain strong for a long time”, affirms Antônio Napp, the company’s CFO.

According to him, to play the “marketplace game” product availability and proximity to the client is necessary. “If you’re not close, tools will not identify you as a delivery player”, explains, citing examples such as iFood. “The tendency is for these platforms to grow with our networks, not independently from them.”

In Pague Menos, the strategy of focusing on clients undergoing treatment for chronic diseases, such as diabetes and hypertension, helps to counter the potential arrival of new entrants, says Carlos Fernandes, vice president of operations at the company. “Clients with this profile visit the pharmacy four times more frequently, and their average ticket is 60% higher,” he explains. “It’s no use building an entire ecosystem without first understanding the patient’s journey.”

The pharmaceutical retailer recently took an unusual step in its quest for recognition outside of Northeast Brazil, its original market. It was the first to set up a pharmacy inside a music festival, The Town, to sell over-the-counter medications. It repeated this same strategy a few weeks ago at Tomorrowland. To do so, it obtained temporary authorizations from Anvisa.

Pague Menos has a three-story pharmacy in Fortaleza, considered the largest in Brazil. But that doesn't mean the company is approaching the American pharmaceutical retail model. “The US model is very commercialized. We will continue selling goods, but seeking to get closer and closer to people. I see the future of pharmaceutical retail going more towards service,” he states. Today, in addition to selling products, Brazilian pharmacies can perform tests and administer vaccines. “But the regulatory reality doesn't allow us to go much further than that,” says Napp, from Panvel.

EXAME contacted RD Saúde, the largest pharmacy chain in Brazil, to learn about its strategies for protecting against disruptive movements, but the company chose not to comment.

Smaller players, such as independent pharmacies with more limited reach and sales channels, are watching the potential arrival of new entrants with a bit more caution, but without ceasing to believe in the sector's strengths. “Around 55,000 micro and small pharmacies provide medications in 93% of Brazilian municipalities,” says Rafael Espinhel, executive president of the Brazilian Association of Pharmaceutical Commerce (Abcfarma).

The organization represents 14,000 companies with this profile. “Small, isolated establishments are more exposed to the risks of market transformations and need more consistent support policies and technical guidance. The challenge is structural, but not insurmountable,” he adds.

The industry is looking

Pharmaceutical manufacturers are becoming more flexible regarding the sale of medicines outside of traditional pharmacies. “Back then, we were against selling medicines in supermarkets without regulation,” recalls Nelson Mussolini, president of the Pharmaceutical Products Industry Union (Sindusfarma). This is an issue that has advanced in an unprecedented way in Congress. For decades, supermarkets have tried to obtain approval to sell over-the-counter medications on their shelves. The bill recently approved in the Senate does not grant this permission, but authorizes the sale of medicines within the establishments, provided they are in separate structures and with a pharmacist present.

“Having their own pharmacy, we see no problem. Brazil took a long time to raise its sanitary regulations and, under no circumstances, did the industry advocate for lowering them,” says Mussolini. Regarding the sale of medicines in marketplaces, he says that, “if there isn't a way to dispense the product quickly and safely, the business doesn't work.”

Small industries, which rely more on physical retail and compete for shelf space in large pharmacies with better-known brands, would have an additional showcase within a marketplace. Ronnie Motta, CEO of Natulab, a manufacturer of over-the-counter medications, recognizes the advantageous side of this convenience—as long as it doesn't imply indiscriminate use of the product. After all, this could be a risk to the reputation and existence of the business. "Decentralization is positive, as long as it's always accompanied by responsibility," concludes Motta.