Online titan Amazon.com Inc. reportedly seeks to expand its foothold in medical supplies, creating a marketplace where hospitals could shop to stock emergency rooms, operating suites and outpatient facilities
Amazon intends to provide more products to hospitals and clinics, The Wall Street Journal reported.
The Seattle online giant is looking to expand its Amazon Business marketplace to serve the health-care industry, hospital executives told the WSJ.
Amazon Business already has a smaller offering of medical supplies.
Amazon Business is a separate business unit of Amazon.com, Inc., which has sold healthcare supplies for several years now. The company serves healthcare customers ranging from physician and dental offices to senior living and long-term care facilities. Amazon Business also serves businesses of all sizes and industries, including educational institutions, Fortune 50 companies, government agencies, restaurants, and sole proprietors.
Shares of healthcare supplier and services companies McKesson, Cardinal Health and Owens & Minor slumped on the news, CNBC.com reported.
Chris Holt, leader of global healthcare at Amazon Business, said Amazon won’t look to imitate established models already in the medical-distribution sector. “Our goal is to be something new,” he said. “We’ve been actively building out new capabilities and features,” to simplify purchasing, he told the Journal.
To be sure, Amazon seemingly makes an announcement on a daily basis that sends chills down the spines of a variety of companies not normally seen as competitors.
Even the world’s biggest container shipping line is trying to stop customers like Amazon.com Inc. and Alibaba Group Holding Ltd. from becoming competitors in just a few years’ time, Bloomberg reported.
“Amazon is a threat if we don’t do a good job for them,” Soren Skou, the Chief Executive Officer of A.P. Moller Maersk A/S, said in a phone interview. “If we don’t do our job well, then there’s no doubt that big, strong companies like Amazon will look into whether they can do better themselves.”
Shares of FedEx Corp. and UPS Inc. dropped last week on a report that Amazon plans to handle more deliveries to its customers’ doorsteps. The question the maritime industry is now asking itself is to what extent the online retailer will also try to take greater control of transportation of shipments bound for Amazon warehouses. For now, those tend to be handled by Maersk and companies like it.
Taking greater control of shipments would give Seattle-based Amazon more flexibility and help it avoid possible congestion in its warehouses.
The threat of Amazon competition looms over the health supply sector, Bloomberg reported.
The tech retail giant acquired licenses in more than a dozen states that would allow it to distribute and sell health-care goods as a wholesaler, Bloomberg reported in October.
“The Amazon bogey finally seems to be finally spreading its wings to medical supplies,” wrote Vijay Kumar, an analyst with Evercore ISI. He said the company could be a “formidable player” when it comes to selling basic hospital staples like gloves, catheters, drapes and other products.
Last year, Amazon announced Business Prime Shipping, which brings the quick delivery associated with Amazon household orders to workplaces.
(Newsmax wire services contributed to this report).
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