- Increased shipping volume. This adds to their market leverage and it can bolster their own logistics business over time. Anything Amazon can do at scale, while at least breaking even, is a very big benefit to their flywheel.
- Another entry into the home, into a person's life. And in this case, a far more important one than most purchases. If Amazon can sell a 67 year old a prescription and get into her home, they're no doubt betting they can also sell her an artificial intelligence tool in the coming years (maybe it takes three years of advertising the Echo on the side of the prescription delivery box to convince the customer).
- It becomes a very sticky repeat business. People will stay with those so long as you don't treat them horrendously. That buys Amazon time to figure out new ways to make money in the segment. It may also be a long-term play on the fact that the US is guaranteed to increasingly shift to government healthcare, as the ACA or equivalent walks its way up the income ladder by necessity; Amazon may see an angle in that.
- Walmart is finally becoming a serious online competitor. They're growing at 2x the rate of Amazon, with about 1/3 the online retail sales. Walmart's online business appears to be kicking into another gear. They've got a $20 billion per year pharmacy sales business. Then there are obviously the other far larger pharmacy-centric giants (the big three have ~72% of the pharmacy business). Anything Amazon can do to press them all in that segment, is a win competitively. To grow at this point, Amazon has to take from everyone else, as US consumer spending is expanding relatively slowly.
When Blockbuster (for example) took on streaming to compete with Netflix, not only were they far too late, but they also charged a fee for movies. People didn't bother because Netflix had unlimited streaming. They also had a poor catalog if I recall correctly. Too many mistakes.
Well, the obvious one is that Express Scripts probably isn't already sending you a package of other stuff every week or so to which a bottle of pills could be added at little or no increased cost, nor do they likely have the clout with shippers that Amazon does.
Yeah, not everyone gets an Amazon package every week, but enough people do that it's going to add up.
The advantage is actually greater with less-frequent refills, as the probability of having another package they can piggyback on within an acceptable window becomes higher the less frequent the refills are.