The investment community was abuzz Tuesday following word that Amazon might be considering a move into the prescription drug business.
Speculation about such a move began surfacing around the time Amazon acquired Whole Foods in June, but analysts at investment firm Leerink fueled the flames on Friday when they commented that Amazon “almost certainly” will get into prescription drugs within a couple of years.
Critics countered that, while it’s hard to rule out Amazon’s will to disrupt another part of the business environment, the online service hasn’t fared as well when dealing with highly regulated industries, including alcohol distribution.
“The highly regulated drug business has never been particularly transparent,” journalist Emma Court wrote in a MarketWatch report on the subject Tuesday. “At best, U.S. drug pricing is complex; at worst, it’s dysfunctional.”
Still, pharmacy benefit management and mail order firms like Express Scripts could become particularly vulnerable if Amazon jumps into the arena. Some speculate that the powerful online retailer, with its robust cash, may even look to enter into the space via acquisition.
Following last Friday’s Leerink report, Express Scripts stock fell 2.5 percent, while the CVS and Walgreens chains fell about 5 percent, according to a CNN Money report, which noted that all three stocks fell further in trading on Monday, even as Amazon and the major stock markets were up.
In midday trading Tuesday, Express Scripts and Walgreens were down again, while CVS stock was up slightly.
In, perhaps, unrelated news, Express Scripts announced Tuesday that it is buying eviCore for $3.6 billion. The Bluffton, SC-based eviCore contracts with health plans and commercial clients to manage health care services.
For its part, Amazon said it had no comment on the speculative market reports.
(Sources: CNN Money; MarketWatch)
