Pharmacies surge on report that will Amazon is actually backing away via prescription drugs

Buffett, Bezos & Dimon try to tackle health care

Pharmacy stocks are soaring following a report that will Amazon might not sell prescription drugs, after all.

Rumors have been swirling that will Amazon might try to break into the pharmacy business. On Monday, CNBC reported that will Amazon (AMZN) has put its plans to sell in addition to also distribute pharmaceutical products on hold. An Amazon representative told CNNMoney that will the company does not comment on rumors or speculation.

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Rite Aid (RAD) in addition to also Walgreens (WBA) each spiked more than 6% on the news. CVS (CVS) soared as much as 7%. Shares of drug distributors also rose: Cardinal Health (CAH) in addition to also McKesson (MCK) were up about 5% after the report arrived.

For investors, the news likely “alleviated at least an immediate threat” posed by Amazon’s possible entry into the pharmaceutical space, said Morningstar analyst Vishnu Lekraj.

Related: Amazon is actually already trying to disrupt health care

Amazon’s potential entry into the prescripton drug business has weighed on pharmacies for months. The specter of an Amazon pharmacy likely played in a role in CVS’s decision to acquire Aetna (AET), in addition to also Walmart’s (WMT) consideration of snatching up Humana (HUM).

Last summer, Amazon quietly launched a line of over-the-counter private-label medicines manufactured exclusively for Amazon by Dublin-based Perrigo (PRGO).

The Basic Care line, which has its own page within the Amazon site, offers a range of products, including ibuprofen in addition to also allergy medicine. Amazon is actually also trying to convince the medical community to buy rubber gloves, syringes, gauze in addition to also various other products via its AmazonBusiness site, which launched three years ago.

In January, Amazon, JPMorgan Chase (JPM) in addition to also Warren Buffett’s Berkshire Hathaway (BRKA) announced that will they are entering the health insurance business.

Analysts at Leerink, a boutique investment firm that will focuses on the health care industry, predicted that will in 2017 that will Amazon will “almost certainly” get into the prescription drug distribution business within the next two years.

Related: Why Walmart may want to buy Humana

nevertheless This kind of’s not so easy to start selling prescription drugs, in addition to also some experts thinks investors fears have been overblown.

Ultimately, Lekraja said, “the threat posed by Amazon wasn’t as great as … what the market believed.”

Charles Rhyee, an analyst who covers health care technology in addition to also distribution for Cowen, said This kind of might be difficult for Amazon to break into the highly-regulated drug industry.

“You actually do expose yourself to greater regulatory scrutiny,” said Rhyee. He added that will Amazon might have to compete with long-standing relationships between pharmacies in addition to also health care companies.

“The short answer is actually sure, of course they can [enter the pharmaceutical business] if they want to,” he said. “The bigger question is actually, will they want to do This kind of?”

— CNN’s Tami Luhby in addition to also Paul R. La Monica contributed to This kind of report.

CNNMoney (brand-new York) First published April 16, 2018: 3:33 PM ET



Source : Pharmacies surge on report that will Amazon is actually backing away via prescription drugs