Watch out, Walmart (WMT) .

Amazon.com Inc. (AMZN)  could significantly lower prices for prescription medications following the retail giant's pending purchase of online pharmacy PillPack. The retail giant already offers cheaper over-the-counter drugs compared to its rivals. 

Amazon's private label over-the-counter medications for common ailments, called Basic Care and made by Perrigo plc (PRGO) , carry lower prices compared to the majority of similar products offered by Walgreens Boots Alliance Inc. (WBA) and CVS Health Corp. (CVS) , according to Jefferies LLC analyst Brian Tanquilut.

"According to our proprietary analysis, WBA & CVS's net prices are currently more expensive (+20% & 22% at the median) than AMZN's Basic Care products with 84% of WBA's products & 72% of CVS's products selling at higher price points," Tanquilut wrote in a note on Friday, July 6.

A PillPack prescription
A PillPack prescription

The analyst wrote that he expects CVS and Walgreens to face continued pressure on same-store sales of over-the-counter and other non-pharmacy products.

Amazon launched its over-the-counter drug offerings last August.

As for prescription medications, Amazon is "willing and able" to bring down prices, "but it depends on the payer relationship," said Richard Evans, head of SSR Health LLC, the healthcare practice of investment research firm SSR LLC. Payers include UnitedHealth Group Inc. (UNH) , Humana Inc. (HUM) , Anthem Inc. (ANTM) and Cigna Corp. (CI) .

Setting payer relationships aside, "can Amazon bring efficiencies to drug distribution and/or is willing to operate lower dispensing margins? The answer is plainly yes," Evans said.

Amazon could try to undercut Walmart Inc.'s ( WMT) $4 pricing on generic prescription drugs, according to Arielle Trzcinski, a senior analyst at Forrester Research Inc. Walmart launched its $4 prescription program for monthly supplies of popular generic drugs with no insurance needed in September 2006. 

Amazon has "an opportunity to bring [prescription drug] prices even lower," Trzcinski said. "In terms of trying to get a foothold in the market, they can try to undercut what Walmart has done."

Amazon on June 28 said it was buying venture capital-backed PillPack in a transaction expected to be completed within the second half of the year, sending shares of drugstore companies and drug distributors plunging. Terms of the deal were not disclosed, but the Wall Street Journal reported that the price tag was about $1 billion. Walmart was reported by CNBC in April to be in talks to acquire PillPack.

When the deal closes, Trzcinski sees Amazon starting small, focusing on customers that don't have insurance. And when those efforts gain ground, Amazon could bring its offerings to the employee population in its healthcare venture with Berkshire Hathaway Inc. (BRK.A) and JPMorgan Chase & Co. (JPM) , and subsequently to a broader insured base, she said.

There's an opportunity, she said, to "educate consumers about the cash price [of drugs] to ensure they are getting the lowest price for medications," noting that in some instances, the cash price is lower than the insurance copay or pharmacy benefit.

Amazon, JPMorgan and UnitedHealth are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells AMZN or JPM? Learn more now.

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