© Reuters. Analysts divided on impact of Amazon RxPass on GoodRx Holdings

By Sam Boughedda

Shares of GoodRx Holdings Inc (NASDAQ:) are down for a second straight day after Amazon (NASDAQ:) announced on Tuesday that it is rolling out a new product, RxPass, which allows the company’s US Prime members to access generic medications that treat over 80 common health conditions for just $5 a month.

GoodRx is currently down more than 9%.

Reacting to the news, analysts at Citi, which has a buy rating and a price target of $7 per share on GDRX, told investors that while it is even more economical to use GoodRx for consumers taking one drug, for the 30% of Americans who use two or more. drugs, RxPass will be a “very attractive offer”, especially for consumers who are already Prime members.

“We also believe this will put pressure on GoodRx Gold membership (which has just been increased to $9.99/month), although GoodRx Gold offers additional benefits such as telehealth visits for $19 ( vs. $35 via Amazon Clinic) We believe GoodRx will need to pick up the pace of product innovation (see for example GDRX’s new business deal with ESI to fend off the AMZN threat. We estimate the maximum threat at 75-80 million dollars in lost potential revenue,” the analysts wrote.

Wells Fargo analysts reacted to the news with less trepidation, saying RxPass’ announcement “appears to be more barking than biting.”

“While Amazon’s competitive ambitions should not be dismissed, the move to GDRX seems over the top, as we estimate that RxPass addresses approximately 0.5% of annual domestic generic Rx volumes,” argued the analysts, who have an equal weight rating and a price target of $5.50 on GoodRx. shares.

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