Amazon.com Inc (AMZN.O) on Thursday agreed to buy primary care provider One Medical (ONEM.O) for $3.49 billion, expanding the e-commerce giant's virtual healthcare and adding brick-and-mortar doctors' offices for the first time.
The all-cash deal would combine two relatively small players as Amazon continues a years-long march into U.S. healthcare, seeking to grow at a faster pace.
The online retailer first piloted virtual care visits for its own staff in Seattle in 2019 before offering services to other employers under the Amazon Care brand. It likewise bought online pharmacy PillPack in 2018, underpinning a prescription delivery and price-comparison site it later launched.
"We think healthcare is high on the list of experiences that need reinvention," said Neil Lindsay, senior vice president of Amazon Health Services.
The Seattle-based retailer has signaled its ambitions to improve and speed up care. However, a big idea akin to how Amazon has automated the role of cashiers in grocery stores has yet to emerge.
In One Medical, Amazon is acquiring a loss-making company with 767,000 members and enterprise clients such as Airbnb Inc (ABNB.O) and Alphabet Inc's (GOOGL.O) Google, which offer its services as a benefit to employees, according to its website and recent financial results.
Larger rival Teladoc Health Inc (TDOC.N), by contrast, has more than 54 million paying members in the United States and double One Medical's quarterly revenue. News of the Amazon deal sent shares of Teladoc as well as drugstore retailers CVS Health Corp (CVS.N) and Walgreens Boots Alliance Inc (WBA.O) down between 0.3% and 1.8%.
The acquisition makes sense as the "blending of virtual and in-person care is core to both One Medical and Amazon Care's strategy," said Citi analyst Daniel Grosslight.U.S. Senator Amy Klobuchar, who is also the Chairwoman of the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights on Thursday urged the Federal Trade Commission (FTC) to investigate Amazon's proposed deal, expressing concerns over the acquisition's implications for personal health data.
SOURCE: REUTERS
IMAGE SOURCE: Freepik
