Amazon Business has taken back its decision to sell drugs to hospitals. Amazon did make plans to sell and distribute pharmaceutical products earlier but, has decided not to. It is said that it’s partly due to its inability to convince big hospitals to make a change in the traditional purchasing process and the need to build a sophisticated logistics network. This process involves many middlemen and long-held relationships.
It is believed that pharmaceutical distributors and medical suppliers are the most vulnerable to Amazon’s venture into the healthcare sector. The fact remains that Amazon is an expert in the shipping and logistics of everyday products namely, toilet paper and cleaning supplies. The threat from Amazon comes from the fear that it can master shipping and logistics for drugs and medical supplies too.
But, some believe that there is no need to fear as the hurdles may be insurmountable for even someone as established as Amazon. Infact, the fear of Amazon’s entry into healthcare sector has lead to many companies coming together like, CVS Health’s acquisition of Aetna followed by Walmart’s acquisition of Humana. There is also Albertsons Companies, which is one of nation’s largest grocery retailer and Rite Aid Corporation, a leading drugstore chain coming together for a definitive merger agreement.
It doesn’t mean that Amazon has shelved this idea forever. But, it has arrived at a decision that through Amazon Business unit it will supply less sensitive, medical products to smaller clinics and hospitals. But, this can be quite a challenging task too.