Amazon - health care

Like no one has ever underestimated Amazon before. Famous last words! I think that Rite Aid has a BPM you could buy cheap.

CVS Health CEO Doubts Amazon Entry Into Pharmacy

Bruce Japsen, Contributor Aug 9, 2017 8:30 AM 102
The top executive at CVS Health doesn’t see Amazon entering the pharmacy business despite Wall Street’s constant speculation about the online retailer’s threat to brick-and-mortar drugstore chains.

“There are many barriers to entry when you’re looking at pharmacy,” CVS chief executive officer Larry Merlo told analysts in responses to questions about the potential for Amazon to enter the pharmacy business. Questions to Merlo came during an 80-minute call Tuesday to discuss second-quarter earnings.



An Amazon logo is seen inside the Amazon corporate [+]
Competition to CVS or Walgreens Boots Alliance from Amazon would come at a time drugstore chains are forming closer ties with health insurers and employers looking at better ways to coordinate the delivery of medical care. The trend in healthcare is toward value-based models and population health that require pharmacies to have relationships with doctors, hospitals and other providers in the community that have existed for decades.

“Most people are thinking about pharmacy as another distribution point, but pharmacy is also about the clinical outcomes that are provided,” Merlo said. “In an environment where there’s a migration to more value-based care, those clinical capabilities are going to continue to grow in importance. It’s highly regulated, so the barriers to entry are high.”

Some analysts say the price of CVS shares has been hurt by the potential of Amazon to enter as a competitor.

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For Amazon to be successful filling, dispensing and managing patient prescriptions, the online retailer would have to some way gain ties to health insurance companies as well as doctors and hospitals that already have strong ties to their local communities. Increasingly, providers that include pharmacies are forming accountable care organizations and other value-based models that contract with insurers to manage the care of populations of patients, making sure they get the right care, in the right place and at the right time.

“You’ve got more than 90% of prescriptions that are covered by some type of third-party insurance, so there’s an awful lot of work that exists between pharmacists working with payers and physicians to provide that care,” Merlo said.

Merlo’s comments were similar to those made in June by Walgreens CEO Stefano Pessina about two weeks after Amazon announced plans to buy Whole Foods Market for $13.7 billion. “They have so many opportunities around the world in many other categories, which are much, much simpler than healthcare, which is a very regulated business,” Pessina said of Amazon.

Like Walgreens, CVS isn’t taking anything for granted should Amazon make a move into pharmacy. “But at the same time,” Merlo said, “I think that we have a lot of capabilities and a value proposition that can compete effectively in the market.”


Some argue Amazon could make a big dent in the business of mail order pharmacy. But Merlo said that space is far more crowded than it was five years ago and its established presence across the country has built up customer loyalty.

“The CVS Pharmacy model is built on convenience,” Merlo said. “When you think about 9,700 points of access and the fact that you’ve got almost 80% of the U.S. population that lives within a few miles of CVS. Over the last couple years we’ve been working hard to define what omni-channel means for us and means for those customers, and have been investing in our digital tools and capabilities to provide more of an omni-channel experience.”

CVS also owns a pharmacy benefit manager that competes with the likes of Express Scripts, a giant PBM that processed 1.4 billion prescriptions last year. For Amazon to rival CVS or Express Scripts, it would have to own and operate a PBM. Short of an expensive acquisition, Amazon would face challenges getting into the drug management business, some observers say.

“Becoming a PBM is a lot more than dispensing drugs,” Express Scripts CEO Tim Wentworth said on the company’s second-quarter earnings call two weeks ago. “In fact, becoming a PBM requires you to figure out how not to dispense drugs or to dispense the right drugs as much as it does to dispense them. So it’s a long pull to become a PBM.”

www.forbes.com/sites/brucejapsen/2017/08/09/cvs-health-ceo-doubts-amazon-entry-into-pharmacy/amp/

The only desire is to sell things! They don't even need to make money doing it!

I never said that they will not make money down the road.

Again, you are 100% right. We have gone from Walmart opening a store right outside of the city limits. To Amazon (Amazon Customer) not paying sales taxes. And the US Post Office shipping boxes at a loss of $1.35 each.

What a world!

Miami, Whole Foods that deliver is awesome. And, I get my earthworms and ladybugs from amazon and they come all alive, ready to be unleashed. my gardening websites don't even sell those earthworms. Amazon doesn't kill all the businesses of other people, the earthworm guy for instance has jacked up his price by 500%. Thats Mr earthworm Shrkelli. he must be Martin Shrkelli's grand uncle.Those earthworms seemed bigger two years ago, but now I receive them as babies, just two inches or less long. But when they get to 6 inches the birds in my garden pulls them out, so I have to get me more of those, maybe at 1000% more. However, my subscribe and save items have made my life so wonderful, I can't say enough words about Amazon, my shopping time decreased from 1 hr to 2 hrs not including travel time and weight bearing to 15 mins ,all buying fresh food from entry to cash register. I buy NyQuil, shampoo and stuff I can't get from drugstores from Amazon. Amazon fresh was super too, but membership is too pricey so I stopped. But when they delivered fresh food, I stopped going to the supermarket.i even got tropical plants from asia that I don't get from lowes or gardening centers or websites from Amazon, and they are all alive and doing well. I tried ordering food from whole foods, and I went crazy. Heck, you can even write a book and sell it in Amazon. As for the ladybug guy, no ladybug inflation for him. I got them all alive, unleashed them after a rain [youre supposed to do that}, but not one in sight the next morning. All gone to the twilight zone.