PBMs, drug distributors don’t fret Amazon.com, execs say

10 January 2018 - 03:51 pm UTC

Author(s): by Dane Hamilton
The potential for Amazon.com [NASDAQ:AMZN] to enter the drug distribution market is not causing grave concerns among major pharmacy benefits managers (PBMs) and distributors, CEOs said at the JPMorgan Healthcare Conference this week.
 
There has been widespread recent speculation that the Seattle-based e-commerce giant could disrupt the market for prescription pharmaceuticals and drive down prices and profits for the PBMs, which act as middlemen between pharmaceutical companies, payers and patients.
 
This news service reported in December that if Amazon does go after the drug industry it would likely enter through the high-margin PBM area. The largest pharmacy chain in the US, CVS Health [NYSE:CVS], reportedly is buying health insurer Aetna [NYSE:AET] for USD 69bn in part in response to Amazon’s potential plans.
 
Amazon has declined to comment on the frequent speculation, other than to say it has obtained wholesale pharmacy licenses in various states to sell professional-use medical products through its distribution network.
 
Executives with Express Scripts [NASDAQ:ESRX], McKesson [NYSE:MCK], Walgreens Boots Alliance [NASDAQ:WBA] and Humana [NYSE:HUM], which operates the fourth-largest PBM, all said it would be a major challenge for Amazon to get a sizable foothold into the drug supply business and predicted the technology company will avoid the market.
 
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