(Bloomberg) — For months now, pharmacy and health benefits companies have fretted that they’re the next targets of Jeff Bezos’s disruption steamroller. In September Amazon.com Inc. acquired Whole Foods Market, a grocery chain that could theoretically add drug counters to stores; a month later came word that the e-commerce giant had secured pharmacy licenses in more than a dozen states. Analysts issued dire warnings; shares see-sawed.

The industry’s paranoia is justified given Amazon’s propensity to disrupt one sector after another. But it’s worth remembering Bezos has been thinking about the corner drugstore for almost 20 years. No clear strategy has emerged, according to three people familiar with the company’s plans, because Amazon hasn’t yet figured out how to shake up a notoriously complex business. So for the time being Amazon is focused on the $200 billion market for medical supplies. The company already sells bulk packs of latex gloves, bed pads and syringes; now it’s getting into medical devices and instruments. Amazon declined to address speculation regarding its potential pharmacy ambitions.

That’s not to say Amazon won’t eventually start selling prescription drugs. The upside is probably simply too big to ignore. Prescription drugs sales are largely intertwined with groceries and personal items like makeup and shampoo. Every day Amazon doesn’t offer antibiotics and Lipitor, it surrenders shopping carts full of milk, eggs, lipstick, lotion, candy and greeting cards to Wal-Mart Stores Inc., Walgreens Boots Alliance Inc., CVS Health Corp. and the Kroger Co. Prescription drugs are a gateway to more than $1 trillion in consumer spending, making retail pharmacies as ubiquitous as gas stations, banks and fast-food joints. It’s hard to imagine Amazon being anything more than a niche grocery player without pharmacies.

But selling prescription drugs is far more complex than anything else Amazon has attempted, thanks to a fragmented health care reimbursement system and layers of middlemen between pharmacists and their customers. Amazon excels at winning shoppers with wide selection, low prices and quick delivery of online orders. The company uses its base of 300 million shoppers to lure third-party merchants and manufacturers who compete on price.

To sell prescription drugs, the Seattle-based company would have to entice entrenched interests like pharmacy-benefit managers and insurance companies that may prefer the status quo. It could take a year or more just to get state licenses, though Amazon could buy a pharmacy that’s already licensed everywhere. And filling each prescription involves multiple steps, which could alienate customers accustomed to Amazon’s ease of use. “Amazon is in the business of saying yes, and pharmacy-benefit managers are in the business of saying no,” says George Hill, an analyst at RBC Capital Markets.

Bezos first signaled an interest in pharmacies back in 1999, when Amazon purchased a stake in Drugstore.com. The deal gave him a front-row view into an online startup looking to disrupt CVS and Walgreens the same way he was disrupting book retailers Barnes & Noble and Borders. Bezos took a hands-on role in Drugstore.com’s operations, seeing the corner drugstore as a gateway to older shoppers then reluctant to share credit card numbers on the web, according to a person familiar with the matter. If Drugstore.com could make the pharmacy experience more convenient for older people, Bezos could simultaneously make them more comfortable buying other things online and vastly expand his e-commerce business.

That promise was never realized. Drugstore.com failed to crack the code on online drug sales, with most revenue coming from over-the-counter items that made it more an Amazon competitor than partner. Walgreens Boots Alliance Inc. killed the entire experiment by purchasing the money-losing startup in 2011. It ultimately sidelined the site to promote Walgreens.com, where Drugstore.com traffic is still redirected.

Still, Bezos never lost sight of pharmacies. Providing prescription drugs is an ideal way to enhance the value and stickiness of the Amazon Prime subscription service, which includes free package delivery, online video streaming and photo storage. Amazon offers a variety of gadgets and services to keep homes stocked with supplies it sells, all of which could be applied to prescription drugs. Amazon Subscribe and Save lets shoppers automate delivery of frequently purchased items like toothpaste and tissues. Amazon Dash Buttons let shoppers summon more paper towels and dog food with the push of a small internet-connected device. Prescription drugs, especially for people on a medication regimen, fit perfectly into Amazon’s convenient household replenishment strategy. Even better, drugs are lightweight, making their delivery less costly than bottled water and laundry detergent.

Within Amazon, ideas for entering the prescription market ran the gamut, according to three people familiar with the conversations. Contact-lens replenishment could be a good way to test the waters. Robots could dispense medications to automate the process and cut costs. Amazon could partner with a pharmacy to deliver online prescriptions through its two-hour delivery service Prime Now, to gauge demand without fully committing. And more recently, executives have mulled using Amazon’s voice-activated Alexa platform to remind users when it’s time to take pills and order refills.

Inside Amazon, the arguments against entering the drug business “came from individuals with pharmacy experience who stressed the federal and state regulatory hurdles Amazon would have to leap, and the sheer magnitude and complexity of the industry,” says Brittain Ladd, a supply-chain consultant and former Amazon employee who worked on its grocery strategy. “Every time such arguments would come up my reply was the same as many others in the room, ‘We’re not looking to re-imagine something easy.’”

Those difficulties and Amazon’s lack of expertise was on full display this month in Maine, where three license applications that would have allowed Amazon to distribute drugs lapsed. That’s either a sign Amazon isn’t interested in selling drugs or an example of rookie struggles with the complex regulations, RBC’s Hill wrote in a Dec. 5 note.

Amazon excels at persuading shoppers to bypass brick-and-mortar stores by offering them competitive prices and convenient delivery on an assortment of goods far greater than they can find in even the biggest of stores. It conducts multiple simultaneous experiments—introducing new products to customers in different ways—reacting quickly to real-time results on its web store.

Drug sales, though, involve long-term contracts covering millions of people through pharmacy-benefit managers, insurers and employers, none of which lend themselves to the rapid-fire experimentation and changes that have been key to Amazon’s success with other goods. Consider the complications. When a doctor sends in a prescription, the pharmacy has to check with the patient’s insurer to see whether the drug is covered and how much the patient owes, which depends on how much a patient has already paid towards a deductible. Where the drug falls in that particular plan’s formula also affects the amount the patient has to pay. If the drug isn’t covered, the doctor needs to be contacted—by the pharmacy or the patient—to send in a new prescription.

So several years ago Amazon executives decided instead to sell stethoscopes, catheters and other medical supplies to doctors’ offices and hospitals. That meshes perfectly with the company’s five-year-old business-to-business marketplace, relaunched in 2015 with a new name and expanded inventory. It also plays to Amazon’s strengths: consolidating buying power to eliminate middlemen, driving down prices and automating ordering and replenishment. In October, the St. Louis Dispatch reported that Amazon had secured licenses in multiple states needed to sell medical devices and equipment. “Wholesale licenses are required for Amazon Business to sell professional-use only products to healthcare customers—from medical and dental offices to hospitals,” Amazon said in an emailed statement.

Analysts still see plenty of ways for Amazon to enter the prescription drug market. Amazon could use its buying power to snatch up cheap generic drugs directly from manufacturers and sell them for cash to the uninsured, according to SSR Health. This is one place for Amazon to bypass the insurance companies and prescription benefit managers that make selling to insured patients so complex. One of the boldest ideas floated by several analysts would be for Amazon to buy a pharmacy benefits manager like Express Scripts Holdings Co.

Even so, many shoppers prefer get their medications from a store, which offers peace of mind that their order is correct and the opportunity to speak with a pharmacist. Mail-order prescriptions fell 23 percent from 2012 to 2016, according to Adam Fein, CEO of the Drug Channels Institute, with mail pharmacies dispensing only 10 percent of all 30-day equivalent prescriptions in 2016. And the cash generic-drug market for the uninsured -- once eyed by Wal-Mart -- is considerably smaller thanks to Medicare Part D and Obamacare. The cash market makes up about 7 percent to 8 percent of all prescriptions, and has been declining slowly along with the number of uninsured people, according to Fein. Revenues from cash-paid prescriptions are about $25 billion a year, he said.The most promising window for Amazon may be the rising out-of-pocket costs shouldered by those with prescription-insurance plans. About half of all insurance plans had deductibles on prescription drugs in 2016, up from 23 percent in 2012, according to Pharmaceutical Research and Manufacturers of America. If insured drug-takers become more cost-conscious, Amazon could attempt to bring convenient online price transparency to a complex industry that makes it difficult for customers to shop around. Amazon could be encouraged to push through the complexities to increase the value of Prime membership. Two-thirds of Prime members would fill prescriptions through Amazon if the company offered them, according to research by Cowen Inc.

Bezos, who has proven patient, relentless and unafraid to make big bets, may be willing to wait for the right moment to move in. After all, the Whole Foods purchase followed a decade of online grocery experimentation with little market share to show for it. He’ll wait and watch for the right opportunity, letting startups burn money from their investors trying to entice shoppers to change the way they buy drugs, says Guru Hariharan, a former Amazon executive and founder of Boomerang Commerce Inc., which designs software for large retailers.

“Amazon will want to get into the pharmacy market when it starts to see a tipping point rather than lurking around for a decade,” Hariharan says. “They'll wait for the perfect time to transfer their customer's love for their brand into something they can make big dollars on.”

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