Pharmacy stocks tumble on report Amazon is weighing a push into physical pharmacies

Amazon Pharmacy

Shares of drug retailers including Walgreens Boots Alliance and CVS dropped on Wednesday, as Amazon was reported to be looking at options to set up physical pharmacy locations in the US.

Talks at Amazon about setting up standalone pharmacies are mostly exploratory and there are no firm plans to open physical locations, three people familiar with the matter told Insider. Such a move would be part of a plan by the online retail behemoth to earn a larger share of the country’s $370 billion prescription drug market.

Shares of Walgreens fell by as much as 5.7% then pared the loss to 3.5%. Rite Aid tumbled by 6.4% before trimming the decline to 2.1%. CVS was down 1.7% after a pullback of nearly 4%. In the retail pharmacy space, the trading wiped out $6 billion in market value within an hour of the report’s publication.

Meanwhile, shares of drug wholesalers AmerisourceBergen and Cardinal Health shed 0.6% but were off session lows. McKesson moved down 1.1%.

November marked the launch of Amazon Pharmacy, through which people purchase their prescription medications online and receive them with two-day shipping if they have a Prime membership. Amazon entered the business of prescription-drug sales when it purchased online pharmacy PillPack in 2018.

Amazon embarking on any meaningful rollout of stores could take more than a year, one source told Insider.

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Amazon is reportedly eyeing a $100 million investment in the Apollo Pharmacy chain, further expanding its healthcare plans

Amazon Pharmacy
Amazon considers $100 million investment in India’s pharmacy chain

  • Amazon is looking to invest nearly $100 million in Apollo Pharmacy, the Indian pharmacy chain, two people familiar with the plans told the Economic Times Wednesday.
  • Amazon’s plans to expand in India come after the launch of its own Amazon Pharmacy service in the US November 17, allowing people to buy prescription drugs through its website.
  • The potential investment would come amid competition in India from Mukesh Ambani’s Reliance, which recently bought a majority stake in online pharmacy Netmeds.
  • Indian trader groups say online drugstores can contribute to medicine sales without proper verification.
  • Visit Business Insider’s homepage for more stories.

Amazon is reportedly considering a nearly $100 million investment in India’s pharmacy chain Apollo Pharmacy, close on the heels of its launch of an online pharmacy to deliver prescription drugs in the US.

The company is looking to face up to Reliance Industries Ltd and Tata Group in India’s fast-growing drug market, the Economic Times reported Wednesday, citing two people aware of the plans. 

Amazon already delivers medicines in India and the potential investment would come amid rising competition from Mukesh Ambani’s Reliance, which bought a majority stake in online pharmacy Netmeds.

Both Amazon and Apollo Hospitals, which owns Apollo Pharmacy, declined to comment to Reuters.

The growth of e-pharmacies has left many Indian trader groups feeling threatened. They say online drugstores can contribute to medicine sales without proper verification and the entry of large players can cause unemployment in the sector.

Amazon’s plan to further expand in India comes after it launched its US Amazon Pharmacy service November 17, increasing its competition with drug retailers such as Walgreens, CVS Health and Walmart.

US customers can now buy drugs through Amazon’s main website.

Amazon Prime members would get benefits from the service including two-day delivery and big price cuts on generic and brand-name drugs, the company said.

Read more: Read the leaked talking points that Amazon Web Services employees are using to explain its recent massive cloud outage: ‘There is no compression algorithm for experience’

Since 2018, when the company bought a small drug-delivery startup called PillPack, industry watchers have been expecting Amazon to move into delivering drugs.

In June 2019, Amazon launched a brand of over-the-counter medication, and in August 2020, the company launched a health-monitoring wristband called Halo.

Business Insider reported in November that as the retail firm expands into healthcare, it would need to be careful not to scare consumers who may be concerned about their data privacy.

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