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Amazon looks to expand in the health space via One Medical merger

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Yahoo Finance's Anjalee Khemlani discusses Amazon's acquisition of primary health care provider One Medical and the implications of the merger for patients and the industry.

Video Transcript

BRIAN CHEUNG: Well, shifting gears to a trending ticker this morning. Shares of Amazon on the move after the company entered an agreement to acquire One Medical in an all cash transaction. That's valued at about $3.9 billion, including the group's net debt.

With all the details, let's bring in Yahoo Finance's Anjalee Khemlani here on set. Anjalee, give us the details on what this deal is, how significant it is for Amazon. We know they already have worked with PillPack.

ANJALEE KHEMLANI: Right.

BRIAN CHEUNG: That was a big story for their medical entry here, but how significant is this merger?

ANJALEE KHEMLANI: Well, similar to the PillPack situation, We know that they have entered the health care space but they haven't been able to necessarily grow at scale. And that's really what's on the table here, is how does One Medical fit into already what Amazon has as Amazon Care? The PillPack situation, which we have to remember, is not entirely Amazon operated.

It does lean on a subsidiary of Cigna. One Medical went public back in 2020. It does include physical locations, as well as largely relies on a tech platform and tech support there. So what Amazon is doing is basically snapping up that internal tech platform and relying on it again.

So that sort of seems to be the strategy. We know, of course, when they were a partnered with Berkshire as well as JPM, that fell apart pretty quickly. And that's actually a result of what a lot of people in the market say is just the health care system being so complex that you can't really break it necessarily.

So Amazon sort of edging its way. There are, of course, concerns about Amazon's ability to protect the data and the privacy of patients. And especially because these physical locations are in some areas, areas where abortion bans are taking place. So it's a lot on the table right now, a lot to unpack.

BRIAN CHEUNG: Yeah and you mentioned the data aspect, I think that has kind of been a big foundation of some of the quick reactions we've gotten this morning, with some groups down in DC saying that antitrust regulators need to look into this. Do you think there could be a case for the DOJ or the FTC to look into this deal?

ANJALEE KHEMLANI: Well, we do have to remember that One Medical also snapped up Iora Health, which is a Medicare provider. So that's something that, of course, the government is going to be focused on, but there are some saying that Amazon is not quite big enough to be, is that low risk, basically, for any antitrust issues.

BRIAN CHEUNG: Interesting. We'll have to see if regulators agree with that. But again, an ongoing story.

We'll continue to watch that. Yahoo Finance's Anjalee Khemlani, thanks so much. Appreciate it.