Amazon considers launch of physical pharmacies: RPT
Amazon mulls over a potential launch of physical pharmacies in the United States, Insider reported on Wednesday. Yahoo Finance's Julie Hyman, Myles Udland and Brian Sozzi share the details.
Video Transcript
MYLES UDLAND: All right, let's get some breaking news. As we head to break here, some pharma stocks under pressure. CVS, Rite Aid, Walgreens all down a couple of percentage points here on a report coming out of Business Insider that Amazon is, quote, "considering options for creating a physical retail pharmacy presence in the US." That's according to three people familiar with the matter.
The article continues that there is not a concrete plan for Amazon to build these. And the talks are mostly exploratory at this point. But we're kind of back in that phase, at least in the pharma space, where you do the old Brian Sozzi, Amazon considers X, and stocks react. We all remember that from back in the 2016, 2017 days, right around the Whole Foods deal time. It seemed like Amazon was going to try to eat up anything physical retail.
BRIAN SOZZI: Right, Myles, I remember running around pretty frantically in my former newsroom, when Amazon made that Whole Foods deal, and running around frantically because of the deal that, in fact, it actually happened. And then you just see-- you just saw grocery store stocks absolutely get hammered and have it absolutely terrible over the next month, just got hammered here.
But I would encourage investors to remember this. Amazon, it's going to take-- would take decades for Amazon to roll out the thousands and thousands and thousands and thousands of stores that CVS and Walgreens have opened and try to replicate that model. Just because Amazon opened five pharmacies outside in some rural location trying to hawk medicines doesn't mean they're going to be the next CVS or Walgreens or they actually want to be the next CVS or Walgreens.
MYLES UDLAND: And a reminder, they are in PillPack. It's not like they're not in the space--
JULIE HYMAN: Yeah.
MYLES UDLAND: --as well.
JULIE HYMAN: Well, and when they bought PillPack-- if you recall when they bought PillPack, we saw similar kind of reaction, right? Not just among the pharmacies, but also the pharmacy benefit managers. And sort of, there was a lot of consternation all along that chain. And that hasn't yet materialized. Or maybe it still will.
MYLES UDLAND: And look, I mean, I think we talked about Amazon deal news earlier in the program with confirming the deal to buy MGM. I think, Sozzi, you and I might differ a little bit on the Whole Foods deal, but it's been a clunker for Amazon. It hasn't really done anything. It hasn't changed how Whole Foods really operates. It hasn't really dramatically changed the way that Amazon's grocery business is operating. They have the capital to keep it. It doesn't really matter. I think a different kind of business with more capital constraints probably would be looking to spin that thing off at this point.
And so, it's not like Amazon has this big long history of buying big consumer facing brands, totally remaking it, and then they become a huge killer in their space. So another consideration here for kind of this knee jerk pharma reaction we're seeing.
BRIAN SOZZI: No, Whole Foods, I think it has been a disappointment, but it gave Amazon what it wants-- data.
