Amazon: retailer, entertainer, cloud-host… drug dealer?
If two analysts from Leerink Partners are to be believed, Ecommerce giant Amazon is about to start selling drugs. Prescription drugs, that is, in a move that will put serious pressure on other names in the space. The move will add yet another product category to the massive retailer, which rose to prominence by outcompeting brick and mortar book stores in the 90s. Even then, founder Jeff Bezos had plans to make Amazon an “everything shop”, and those plans are coming closer to fruition. Today, the company sells everything from phones to kitchen sinks, and includes streaming video on demand platforms, web hosting services, and much more.
Amazon’s share price is up 31% year to date
SOURCE: Yahoo Finance
According to Leerink Partners, Amazon is “in active discussions” with mid-sized pharmacy benefit managers and possibly larger players too. Analyst David Larsen said: “it’s a matter of when, not if. We expect an announcement within the next 1-2 years.” His colleague, Ana Gupte, wrote in a report last Friday Prime Therapeutics could be a target, and that Amazon’s entrance into drug selling would pose “an immediate near-term threat” to retail pharmacists.
Linda Cahn, a consultant at Pharmacy Benefit Consultants, thinks that Amazon could bring the same kind of magic to drugs as it did to books in the 90s. She said: “Amazon could bring transparency into a marketplace that is entirely lacking. They are disruptive instantly if they do it differently.”
Dominion holds Amazon in its Global Trends Ecommerce Fund.
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