Amazon.com, Inc. (NASDAQ:AMZN) has been aggressively pushing into new markets where it has been taking the crown from other companies and this time it is jumping into the prescription drug market.
The online retail giant is reportedly planning to start selling drugs through its online retail platform. The company is reportedly in talks with managers in mid-market pharmacies as part of its plan and it has also hired analysts to carry out a review of the drug retailing market to determine whether the idea makes sense.
“We are convinced that Amazon will almost certainly enter the drug distribution value chain within 2 years, evolving into a more disruptive offering over time,” wrote Ana Gupte, an analyst at the Leerink brokerage firm in a note to investors.
There has been speculation that Amazon has been targeting the pharmaceutical market for quite some time. However, the recent announcement further points to a higher possibility of the pursuit becoming a reality. CNBC stated on Friday that the online retail giant will most likely come up with a final decision on whether or not to venture into retail drug sales before Thanksgiving.
Such a move would be quite threatening to firms such as CVS Health Corp (NYSE:CVS), Walgreens Boots Alliance Inc (NASDAQ:WBA) and Rite Aid Corporation (NYSE:RAD). In fact, the shares of the three companies took a dive after the emergence of reports that Amazon was contemplating joining the pharmaceutical market. This is because investors are aware that the retail giant might secure a huge part of the market, thus taking away from these companies. It thus means Amazon a huge threat to the companies and businesses that deal with retail drug sale.
Wells Fargo & Co (NYSE:WFC) recently released a report stating that a lot of consumers are hoping that the online retail giant will venture into the drug business. This was after a research study which revealed that five out of every 10 adults in the U.S would purchase drugs from Amazon if it were to pursue the pharmacy business.
Amazon stock closed the latest trading session on Friday at $989.58 after a 0.89 percent gain compared to the value of the stock during the previous close.