GoodRx stock plunges after Amazon announces push into pharmacy

GoodRx signage on the outside of the Nasdaq on the day of its IPO, September 23, 2020.

Source: GoodRx

Shares of GoodRx, a company that finds users prescription drugs at a discount, plunged more than 20% in premarket trading Tuesday after Amazon announced its biggest move yet into the pharmacy space.

The e-commerce giant revealed Amazon Pharmacy on Tuesday, which will allow customers in the United States to order prescription medications for home delivery. Amazon Prime members will get free delivery.

The announcement also spooked investors in traditional pharmacy giants. Shares of CVS and Walgreens were down nearly 8% and 10%, respectively, while Rite Aid‘s stock dropped nearly 12% in the premarket.

Amazon shares were up nearly 2% in early trading.

Doctors will be able to send prescription requests directly to Amazon Pharmacy. Patients can also request to transfer their prescriptions from an existing retailer, like Rite Aid or CVS.

GoodRx, meanwhile, offers users a free list of discount cards and coupons to cut down costs of their prescription medication. The company collects fees from the pharmacy benefits managers it works with.

Subscribe to CNBC on YouTube.