Is Amazon a Threat to Traditional Drug Retailers?

CVS and Walgreens stock both dropped Wednesday on the speculation that Amazon will enter the pharmacy business.

Shares in both retailers closed down more than 3% on May 17, soon after a CNBC report speculated that Amazon is getting into the drug retailing business. 

While the move is not definite, the massive global retailer is hiring a business lead to figure out how the company can break into the market, according to CNBC. In addition, a CNBC source said that Amazon has started to recruit more broadly from the pharmacy industry.

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Amazon is also reportedly considering the development of a pharmacy benefit manager for its employees.

Walgreens declined to comment to Drug Topics on Amazon’s potential move into the business or on its stock drop, and CVS representatives did not respond to a request for comment.

Amazon recently started selling medical devices and equipment in the United States, so a move into other health-care sectors is not out of the question. However, while the news may affect the stock performance of drug store chains in the near-term, some analysts are doubtful that it will have a long-term impact. Drug chains have relationships with PBMs, payers, physicians, and others that span decades.

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