Economy

Amazon likely on verge of entering retail drugs business

It is nearly a certainty that Amazon.com will enter the business of prescription drug sales by 2019, said a pair of Wall Street analysts. The report said the analysts expect an announcement would be made in 1 to 2 years.

Amazon has been slowly but surely inching into the pharmacy space as of late, hiring some key executives from the industry to help evaluate its potential. One such hire is Mark Lyons from Premera Blue Cross, who will be responsible to build an internal pharmacy benefits manager for its own employees.

Goldman Sachs reportedly published a report in August of this year, in which it speculates that Amazon's eventual goal will be to improve price transparency for consumers and reduce out-of-pocket costs.

Amazon Web Services, its cloud platform, is a common go-to for medical and health companies and the company has been increasings its presence in that niche.

Amazon's move into the grocery retail business is significantly less regulated than the prescription drug business, though.

Reports that Amazon is thinking about taking on the prescription drug industry have sent shares of CVS and Walgreens off a cliff.

Shares of drug retailers Walgreens closed down 5.8 percent, Rite Aid 4.9 percent and CVS Health 4.9 percent.

A spokesperson for the company declined comment. The pharmacy business has "many barriers to entry, " Merlo said at the time.

Global ecommerce major is considering a foray into the prescription drug market. The three biggest drug benefit managers - CVS, Express Scripts Holding Co. and OptumRx, a unit of insurer UnitedHealth Group Inc. - process about 70 per cent of the nation's prescriptions, according to Pembroke Consulting.

Rumblings about Amazon's entry into the drug market have been brewing for months.

Analyst firm Leerink has separately reported that Amazon will get into the pharmacy management space.



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