[{"innerBlocks":[],"name":"core\/freeform","postId":2825,"blockType":{"name":"core\/freeform","keywords":[],"attributes":{"content":{"type":"string","source":"raw"},"lock":{"type":"object"}},"providesContext":[],"usesContext":[],"selectors":[],"supports":{"className":false,"customClassName":false,"reusable":false},"styles":[],"variations":[],"apiVersion":3,"title":"Classic","description":"Use the classic WordPress editor.","category":"text"},"originalContent":"Amazon.com is casting a long shadow over the healthcare industry.

The prospect of the giant Internet retailer entering the business is beginning to cause far-reaching reverberations for a range of companies, potentially precipitating one of the biggest corporate merger deals this year.

On Thursday, the pressure was plain to see. A report that Amazon had received pharmacy-wholesaler licenses in a dozen states triggered a fast and steep selloff in stocks that wounded the likes of McKesson, AmerisourceBergen and Cardinal Health. And late in the day, shares of Aetna surged after a Wall Street Journal report that it\u2019s in talks to be taken over by CVS Health Corp. for more than $200 a share.

CVS and Aetna have held discussions about a potential deal, according to people familiar with the matter who asked not to be identified, as the details of merger discussions aren\u2019t public.

Representatives for both companies declined to comment.

Executives in the drug industry say that Amazon could use its expansive online reach and its logistical muscle to threaten companies that ship and sell medicines to consumers and cut pricing deals with drug makers.

\u201cSize and scale-wise, they can disrupt anywhere they want to disrupt,\u201d said Chip Davis, president of the Association for Accessible Medicines, a trade group for generic medication, in an interview.

A deal for Aetna could conceivably move CVS further away from the business of brick-and-mortar retail drugstores and deeper in health services such as pharmacy benefits, where it already has a sizable presence.

Combining Aetna and CVS would create a health services giant and a bigger competitor for UnitedHealth Group, which is the largest U.S. health insurer and has its own clinics and a pharmacy benefits unit.

The presence of Amazon is already being felt by retailers and companies that sell drugs over the counter. The head of of Bayer AG\u2019s consumer health business said on a conference call with analysts Thursday that the wider shift to online shopping by U.S. consumers was hurting its business. Erica Mann, the division\u2019s chief, dubbed it the \u201cAmazon effect,\u201d saying buyers are looking for value.

At the same time, the pecking order in the health supply chain is beginning to shift.

Earlier this month, insurance giant Anthem said it was cutting ties with Express Scripts Holding after a long dispute over pricing, and it\u2019s starting its own pharmacy benefits manager in 2020. A bulked-up CVS and Anthem\u2019s new venture could raise the pressure on Express Scripts, which has touted its independence.

Any proposed combination of Aetna and CVS would follow a pair of failed mergers among health insurers. The deals would have reduced the ranks of big U.S. health insurers from five to three, a prospect that led the Justice Department to oppose both prospective combinations.

If the Aetna deal happened, \u201cCVS would have a dominant position\u201d in the drug benefits business, said Michael Rea, founder of Rx Savings Solutions, which has an app that helps patients find low cost drugs.

Analysts have speculated that Amazon could soon enter the business of selling prescription drugs, threatening to disrupt retail drugstores, drug wholesalers and the pharmacy benefits management business. While Amazon has never publicly commented on what its plans may be, CNBC reported this month that the Internet giant could make a decision about selling drugs online by Thanksgiving. The network didn\u2019t name its sources.

Bloomberg News confirmed that Amazon had obtained wholesale-pharmacy licenses in at least 13 states, including Nevada, Idaho, Arizona, North Dakota, Oregon, Alabama, Louisiana, New Jersey, Michigan, Connecticut, New Hampshire, Utah and Iowa. An application is pending in Maine. Some of the licenses were obtained late last year and some this year.

Amazon declined to comment.

The licenses could be part of Amazon\u2019s business-to-business sales effort, which would include sales to hospitals, doctor\u2019s offices and dentists. Amazon on Tuesday announced \u201cBusiness Prime Shipping,\u201d which brings the quick delivery associated with Amazon household orders to workplaces.

On a conference call Thursday with analysts, McKesson CEO John H. Hammergren said the wholesaler doesn\u2019t \u201ctake the entry of any competitor lightly,\u201d but said the company already has a large online order operation and offers services similar to what Amazon does logistically. \u201cTo some extent, we were Amazon before it was cool to be Amazon,\u201d he said.
","saveContent":"Amazon.com is casting a long shadow over the healthcare industry.

The prospect of the giant Internet retailer entering the business is beginning to cause far-reaching reverberations for a range of companies, potentially precipitating one of the biggest corporate merger deals this year.

On Thursday, the pressure was plain to see. A report that Amazon had received pharmacy-wholesaler licenses in a dozen states triggered a fast and steep selloff in stocks that wounded the likes of McKesson, AmerisourceBergen and Cardinal Health. And late in the day, shares of Aetna surged after a Wall Street Journal report that it\u2019s in talks to be taken over by CVS Health Corp. for more than $200 a share.

CVS and Aetna have held discussions about a potential deal, according to people familiar with the matter who asked not to be identified, as the details of merger discussions aren\u2019t public.

Representatives for both companies declined to comment.

Executives in the drug industry say that Amazon could use its expansive online reach and its logistical muscle to threaten companies that ship and sell medicines to consumers and cut pricing deals with drug makers.

\u201cSize and scale-wise, they can disrupt anywhere they want to disrupt,\u201d said Chip Davis, president of the Association for Accessible Medicines, a trade group for generic medication, in an interview.

A deal for Aetna could conceivably move CVS further away from the business of brick-and-mortar retail drugstores and deeper in health services such as pharmacy benefits, where it already has a sizable presence.

Combining Aetna and CVS would create a health services giant and a bigger competitor for UnitedHealth Group, which is the largest U.S. health insurer and has its own clinics and a pharmacy benefits unit.

The presence of Amazon is already being felt by retailers and companies that sell drugs over the counter. The head of of Bayer AG\u2019s consumer health business said on a conference call with analysts Thursday that the wider shift to online shopping by U.S. consumers was hurting its business. Erica Mann, the division\u2019s chief, dubbed it the \u201cAmazon effect,\u201d saying buyers are looking for value.

At the same time, the pecking order in the health supply chain is beginning to shift.

Earlier this month, insurance giant Anthem said it was cutting ties with Express Scripts Holding after a long dispute over pricing, and it\u2019s starting its own pharmacy benefits manager in 2020. A bulked-up CVS and Anthem\u2019s new venture could raise the pressure on Express Scripts, which has touted its independence.

Any proposed combination of Aetna and CVS would follow a pair of failed mergers among health insurers. The deals would have reduced the ranks of big U.S. health insurers from five to three, a prospect that led the Justice Department to oppose both prospective combinations.

If the Aetna deal happened, \u201cCVS would have a dominant position\u201d in the drug benefits business, said Michael Rea, founder of Rx Savings Solutions, which has an app that helps patients find low cost drugs.

Analysts have speculated that Amazon could soon enter the business of selling prescription drugs, threatening to disrupt retail drugstores, drug wholesalers and the pharmacy benefits management business. While Amazon has never publicly commented on what its plans may be, CNBC reported this month that the Internet giant could make a decision about selling drugs online by Thanksgiving. The network didn\u2019t name its sources.

Bloomberg News confirmed that Amazon had obtained wholesale-pharmacy licenses in at least 13 states, including Nevada, Idaho, Arizona, North Dakota, Oregon, Alabama, Louisiana, New Jersey, Michigan, Connecticut, New Hampshire, Utah and Iowa. An application is pending in Maine. Some of the licenses were obtained late last year and some this year.

Amazon declined to comment.

The licenses could be part of Amazon\u2019s business-to-business sales effort, which would include sales to hospitals, doctor\u2019s offices and dentists. Amazon on Tuesday announced \u201cBusiness Prime Shipping,\u201d which brings the quick delivery associated with Amazon household orders to workplaces.

On a conference call Thursday with analysts, McKesson CEO John H. Hammergren said the wholesaler doesn\u2019t \u201ctake the entry of any competitor lightly,\u201d but said the company already has a large online order operation and offers services similar to what Amazon does logistically. \u201cTo some extent, we were Amazon before it was cool to be Amazon,\u201d he said.
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Amazon threat appears to prompt shakeout in healthcare Industry

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