Amazon RxPass a ‘credible threat’ to GoodRx, says Citi

Citi analyst Daniel Grosslight noted that Amazon (AMZN) announced it is rolling out a new product, RXPass, which provides U.S. Prime members with unlimited prescription generic medications for $5 per month. While arguing that it "is still more economical" to use GoodRx (GDRX) for consumers taking one drug, RxPass will be a "very compelling offering" for the roughly 30% of Americans who are chronically taking two or more drugs, the firm contends. This offering will pressure GoodRx Gold membership, though GoodRx Gold provides additional benefits, such as lower-cost telehealth visits, added Citi. The firm, which think GoodRx will need to accelerate the pace of product innovation to fend off the "credible" Amazon threat, sizes the current threat at a maximum of $75M-$80M of potential lost revenue. Citi has a Buy rating and $7 price target on GoodRx shares, which are down 24c, or 4%, to $5.39 in morning trading.