What you need to know about the forces reshaping our industry.


April 4, 2018

Amazon's dive into health care—what it's done and what it might do

Daily Briefing

    While Amazon has been relatively quiet about its move into the health care industry, the company's investments in product development and recent hiring trends "hint strongly" at its overall direction, Christina Farr writes for CNBC.

    Here are 8 clinical technologies that could transform health care delivery

    Farr outlines what Amazon's accomplished so far in the health care space, where it seems poised to go next, and what experts think about the company's long-term plans.

    What Amazon has already done

    Among other moves into the health care space, Amazon recently announced a partnership with Berkshire Hathaway and JPMorgan Chase to create a health care company for their 1.2 million U.S. employees to tackle increasing health insurance costs. The companies are currently searching for a CEO to helm the collaboration.

    Amazon is also bolstering its foray into the medical supply business, partnering up Cardinal Health and other large U.S. distributors and applying for the required state licenses. In addition, Amazon launched its own line of over-the-counter drugs in August 2017, called its Basic Care line, which includes 60 products, ranging from ibuprofen to hair regrowth treatment. The drugs are not produced by Amazon, but rather Perrigo, a private-label manufacturer.

    And Amazon's cloud business, AWS, is courting health care consumers and positioning itself as a competitor with Microsoft Azure and Google Cloud, according to Farr. AWS also recently posted a job listing aimed at fostering relationships with health care start-ups early in their development.

    Amazon is also exploring how to bring voice technologies into homes, hospitals, and clinics. For instance, the company collaborated with Merck in 2017 on a competition to create apps—called "skills"—for its virtual assistant, Alexa designed to assist patients with diabetes. The company also announced in September 2017 that its Alexa devices would be offering basic first aid advice directly from the Mayo Clinic.

    What Amazon might do soon

    While not confirmed, Amazon also seems to be on the verge of doing "something big in the pharmacy space," Farr writes. The company reportedly has more than 24 people exploring opportunities in the pharmacy market—and it's already received approval from 12 state pharmacy boards to become a wholesale pharmacy distributor.

    Amazon also seems to be exploring how to improve care delivery, Farr writes, as the company has hired Martin Levine, one of the top physicians involved with Iora health, a primary care group, and it's met "secretly … with some of the top thinkers" in the primary care space, according to Farr.

    In addition, Babak Parviz, Amazon's VP of special projects, has spoken about the problem of loneliness and health care for older populations. In fact, the company since 2015 has been meeting regularly with AARP to discuss a potential collaboration on health care technology for elderly people.

    Amazon is also speaking to medical records companies, Farr reports, which suggests the company may be planning on making recommendations to physicians about drug pricing and quality at point of care.

    What experts think Amazon will do

    According to two former executives from Amazon, there isn't much that Amazon would be "afraid" to do in the health care market, Farr writes—despite the industry's heavy regulatory burden.

    Curtis Kopf, an ex-director at Amazon who now is the SVP of Premera Blue Cross, said "Every industry has thought that Amazon wouldn't disrupt them."

    But other experts, such as Stefano Pessina, the CEO of Walgreens, say Amazon likely won't delve too deeply into the health care market. Amazon has "opportunities around the world and in other categories, which are much, much simpler than health care, which is a very regulated business," Pessina said.

    No matter the extent of Amazon's reach into the health care space, however, experts believe it will steer the industry toward more consumer-driven practices. Morgan Reed—president of ACT, The App Association, a nonprofit group that represents software developers—said Amazon could help the health care industry in a more consumer-personalized direction, shifting "from 'one treatment for all' to treatment and medication just for you" (Farr, CNBC, 3/27).

    Next: Here are 8 clinical technologies that could transform health care delivery

    A new wave of clinical innovation is poised to enter the health care market in the coming years. Read this report to understand what technologies should be on leaders' innovation agendas moving forward.

    Download Now

    Have a Question?


    Ask our experts a question on any topic in health care by visiting our member portal, AskAdvisory.