As Amazon.com Inc. (AMZN) continues to ramp up its brick-and-mortar presence with physical stores following its $13.7 billion blockbuster acquisition of natural food grocer Whole Foods, many are speculating that it will move into new segments such as prescription drugs and pharmacy.
Over the five-day shopping period which Amazon dubs the “Turkey 5” -- from before Black Friday to Cyber Monday -- the online retailer said its branded devices were a major hit at hundreds of Whole Foods locations. Analysts, including investment firm D.A. Davidson, say next year it could add pharmacies inside of its brick-and-mortar stores. (See also: Sell CVS, Walgreens on Amazon’s Rx Drug Venture?)
Walgreens Boots Alliance Inc. (WBA) Vice Chairman and Chief Executive Officer Stefano Pessina isn’t so convinced about the Seattle-based retailer’s move into the pharmacy business, at least anytime soon. He suggests that the complexity of the prescription and health care industries will make it difficult for the e-commerce and cloud computing giant to make any real strides without a significant acquisition. While many see Amazon as a retailer, Pessina indicated that it should be viewed as more of a technology and logistics company than a firm interested in pharmacy and health care.
“They will not come in an industry so complicated as our industry … At the end of the day, Amazon is not a retailer. It is a technology company,” Pessina told the audience at the Forbes Healthcare Summit in New York on Wednesday. He suggested that “the only way” for Amazon to “enter our space would be to buy or to team up.”
In response to Amazon’s looming arrival, the health care space has gone on the defensive. Both Walgreens and rival CVS Health Corp. (CVS) have formed closer partnerships with insurance companies and employers. CVS has bid up to $66 billion for health insurance giant Aetna. (See also: Amazon Could Buy Walgreens, Rite Aid, Express Scripts.)