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NEW YORK – Amazon started its pharmacy war by bombing the area. Stefano Pessina, general manager of Walgreens Boots Alliance, says he's not "particularly worried" about the $ 835 billion online supermarket buying the PillPack online pharmacist. But investors are not so optimistic: they lost about $ 30 billion worth of pharmacy chains, distributors and insurers after the deal was unveiled Thursday. Consumers, meanwhile, will happily fight against the big margins of the sector.
The company did not say how much it was paying for PillPack, but in April, CNBC reported that Walmart was looking to buy it for less than $ 1. billion. Even though Amazon was paying double what Walmart was considering, we understand why such a small transaction has done so much damage
In addition, Amazon's partnership with JPMorgan Chase and Berkshire Hathaway to reduce health care costs suggests that this deal is part of a broader fight against insurers, benefit managers pharmaceutical and other health care intermediaries
In the last two decades, however, industries such as fashion, furniture and food have all been described by incumbents as relatively impervious to online competition. Bezos has regularly proved that they were wrong. The sectoral bombardment of today could well be the first day of a long and damaging war on the margins of health care.
CONTEXT NEWS
– Amazon said on June 28 that it had agreed to acquire PillPack. The price was not revealed. PillPack is an online pharmacy that is licensed in 50 states and ships drugs to all states except Hawaii. In April, CNBC reported that Walmart was looking to buy PillPack for less than $ 1 billion
– Stocks in pharmacy chains CVS Health and Walgreens Boots Alliance were down 8% and 10%, respectively, early in the session. Shares in drug wholesalers McKesson, Cardinal Health and AmerisourceBergen also fell sharply.
– When announcing Walgreens results on June 28, CEO Stefano Pessina said, "We are not particularly worried. Of course, we are not complacent, "in reference to the acquisition of Amazon.
– On June 20, the Amazon Health Partnership, Berkshire Hathaway and JPMorgan Chase announced that Atul Gawande has been appointed Executive Director. The new nonprofit corporation will be headquartered in Boston and will be "free of any incentive and any for-profit constraint," the three companies said. It will initially focus on technology to provide "simplified, high quality, transparent health care" at a "reasonable" cost to US business employees
(Edited by Antony Currie and Martin Langfield) [19659002] (The author is a Reuters columnist Breakingviews The opinions expressed are his.)
© Reuters News 2018
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