85% of insured members are willing to buy drugs on Amazon: Deutsche

The vast majority of Amazon Prime members who benefit from health insurance told Deutsche Bank that they would be willing to buy prescription drugs from the online retailer's website.

The terms of the deal were not disclosed at the time, but people familiar with the discussions told CNBC that Amazon had paid about $ 1 billion. However, even though Walmsley admitted that the $ 930 billion company could establish a dominant presence in the highly regulated sector for years, some opportunities remain.

"For Amazon, which has a wide variety of healthy and organic groceries at Whole Foods, and the ability to order items using voice commands (Alexa), we believe the opportunity to sell pharmaceutical products to other products is important, "continued the analyst.

Amazon also announced earlier this year that it is partnering with JP Morgan Chase and Berkshire Hathaway to create an independent operation to reduce healthcare costs for the 1.1 million employees of the three companies.

The title of Amazon, which remains the top choice of Deutsche Bank, has risen 8.2% since the announcement. The stock advanced 0.2% on Tuesday, adding a 66% increase since January.

In the short term, however, the Seattle-based giant should be able to tap into a $ 22 billion mail-order market, Walmsley said. Once the Amazon-PillPack agreement closes later this year, Amazon's CEO, Jeff Bezos, should be able to use the company's 450 Whole Foods stores as new drug collection locations, said the company's chief executive. 39; analyst.

Over time, the gain could be impressive.

According to Walmsely, if Amazon could reach 30% of the mail-order pharmacy market, and about $ 55 billion in front-office sales and reach 4% of online advertising in the United States, this could generate a gross profit of 3 billions of dollars.

Walmsley's goal on Amazon is $ 2,300, which implies an increase of over 18% over Monday's closing price.