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- Amazon’s move into pharmacy may not be as big a disrupter as the market thinks, John Blackledge of Cowen Research said.
- The company has several challenges getting into healthcare, including competing with other healthcare giants like CVS and Walgreens.
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Amazon‘s potential entry into the US healthcare industry may not be as large of an opportunity as many believe, particularly compared to other markets Amazon is disrupting like apparel, consumer goods, and groceries, John Blackledge of Cowen Research said.
The company’s reach into the healthcare market will not be a “robust, quickly scalable and disruptive opportunity,” he said.
The tech giant will likely make a small imprint on healthcare because Amazon is unlikely to offer specialty drugs or participate in the hospital and clinical prescription drug verticals, Blackledge said. He argued that Amazon faces the challenge of offering additional wrap-around, or all-inclusive, services, which other healthcare players provide.
Though Amazon’s pharma push could be a $203 billion opportunity, that represents less than half of the US prescription drug market and 62% of the US retail pharmacy and mail markets, Blackledge said.
Despite strong Prime subscription demand for Amazon’s pharmacy offerings and rumors of a potential Rite Aid acquisition, competition will heat up among existing pharmacy leaders, further eroding Amazon’s potential influence on the market, according to Blackledge.
Amazon stock is trading up 0.65% at $1,133.65. It is up 50.33% for the year.
- Markets Insider