Several pieces of recent news suggest that Amazon.com, Inc. (NASDAQ:AMZN) wants to make a big push into the healthcare and prescription drug space.
The company recently hired a top Box executive that specializes in medical expertise. It’s also looking for a general manager for its fledgling pharmacy unit, and pharmacies are starting to step up service offerings in anticipation of the retail superpower’s move into the space.
As CNBC reports, many industry insiders are getting nervous:
“I get asked all the time what Amazon is doing,” said Tom Rodgers, managing director of McKesson Ventures. McKesson, a medical distribution giant, is one of the companies that analysts suggest would be poised for disruption by Amazon.
“Everyone in the supply chain is nervous,” Rodgers acknowledged. “It’s a low-level paranoia that Amazon will drive down profitability.”
Rodgers isn’t that worried yet about Amazon’s foray into the space — at least not yet. He anticipates the company will look to partner up with established companies first — both on the physician finder side, as well for pharmacy home deliveries. Once it proves that it can deliver demand for the services and products, only them would AMZN invest the money necessary to build out its own competing services.
Clearly, many others in the healthcare world are much more concerned. After all, Amazon has had a lot of success in the non-retail world already. Plus, its acquisition of Whole Foods would make an entry into the prescription drug space much easier.
It’s still very early on in this story, and it could take years for any major move to materialize. But the signs are mounting of an impending big move, and quite frankly, the establishment should be scared.
Amazon.com, Inc. shares were trading at $1,035.50 per share on Tuesday morning, down $3.45 (-0.33%). Year-to-date, AMZN has gained 38.09%, versus a 11.74% rise in the benchmark S&P 500 index during the same period.