Last week, Leerink analyst David Larsen said that it’s only a matter of time before Amazon.com, Inc. AMZN 0.33% takes the plunge into the pharmacy business and that Amazon could be selling prescription drugs within two years’ time. On Monday, Bernstein analyst Lance Wilkes said Amazon investors may not need to wait two years.
According to Wilkes, Amazon will likely make its pharmacy intentionsofficial and public before Thanksgiving. Rather than build its own pharmacy benefit manager business from scratch, Wilkes said he expects Amazon to go the Whole Foods route and either buy or partner with an existing PBM.
“Over the past five months we have stated that we think Amazon will enter the retail pharmacy industry, we think they will most likely partner/buy a PBM to enable their entry, and we think they will address the major challenges which have faced online (mail) pharmacy, which are user experience, convenience and price,” Wilkes wrote.
Bernstein sees a partnership with UnitedHealth Group Inc UNH 0.23%’s OptumRx as the path that makes the most sense for Amazon. However, Amazon could also still choose to buy a mail-order pharmacy business or take over a mid-sized independent PBM. Wilkes specifically noted that he does not see Express Scripts Holding Company ESRX 1.15% as a likely buyout target for Amazon.
Bernstein is expecting Amazon to have its pharmacy business up and running in 2019 and in time for 2020 benefit plans. Not only would Amazon’s presence threaten the market share of all the major drug retailers and PBM’s, including Walgreens Boots Alliance Inc WBA 2.09% and CVS Health Corp CVS 2.85%, Wilkes said it could pressure…
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