[ad_1]
What happened
Drugstore shares fell sharply on Tuesday after Amazon.com (NASDAQ: AMZN) launched two new prescription drug services. At market close, the shares of CVS Health (NYSE: CVS), Walgreens Boots Alliance (NASDAQ: WBA), and Rite aid (NYSE: RAD) were down 8.6%, 9.6% and 16.2%, respectively.
So what
Amazon Pharmacy will provide customers with the ability to order their prescription drugs online from the main Amazon website. Prime members can have these drugs shipped to their home for free within two days and enjoy savings of up to 80% by paying without insurance. Amazon Prime’s new Prescription Savings Benefit will also deliver significant savings to over 50,000 other participating pharmacies in the United States.
“We designed Amazon Pharmacy to put customers first – bringing Amazon’s customer obsession to an industry that can be troublesome and confusing,” Amazon Pharmacy Vice President TJ Parker said in a statement. hurry. “We are working hard behind the scenes to manage complications seamlessly so that anyone who needs a prescription can understand their options, place their order at the lowest price available, and have their medications delivered quickly.
Drugstore stocks were hit hard on Tuesday. Image source: Getty Images.
The news prompted investors to sell shares in CVS Health, Walgreens and Rite Aid, fearing that Amazon’s new venture could hurt the profits of those drug companies.
Now what
Amazon is not a competitor to be taken lightly. The e-commerce giant is known to be prepared to take heavy losses as it enters and disrupts new industries. This utter disregard for short-term profits could allow Amazon to quickly gain share in the prescription drug market – and make it harder for traditional pharmacies to compete effectively.
So the current declines in CVS Health, Walgreens and Rite Aid’s stock prices appear justified, and their stocks may remain under pressure as Amazon moves its foothold in the massive healthcare industry.
[ad_2]
Source link