Amazon.com Inc. may be close to breaking into its next new industry.
Leerink analyst Ana Gupte wrote in an Oct. 6 note that Amazon "will almost certainly" start competing in the prescription drug distribution chain within the next two years. Citing calls with pharmacy benefit managers, Gupte wrote that Amazon appears to be talking about the potential move with certain pharmacy benefit managers such as Prime Therapeutics.
"While the exact aspiration and glide path to entry are as yet not clear, it is believed that [Amazon] will start by capturing share in both the cash paying and third-party mail order and possibly specialty pharmacy segments," Gupte wrote. Amazon's entry would likely evolve into "a more disruptive offering over time," with consequences for retail pharmacy chains such as Walgreens Boots Alliance Inc. and CVS Health Corp.., she wrote.
Citing an unnamed source, CNBC also reported Oct. 6 that Amazon will make a decision about competing in drug distribution before Thanksgiving.
Amazon did not immediately respond to a request for comment.
The research note and report come after months of discussion from analysts and pharmacy executives about whether Amazon would enter the prescription drug business. In May, CVS CEO and President Larry Merlo said the e-commerce giant would face "high barriers to entry" should it compete against CVS, Walgreens and other firms with pharmacy benefit-managing operations.
Shares of Walgreens were 2.6% lower in midday trading on the Nasdaq at $71.28 on Oct. 9, after closing down 5.8% on Oct. 6. Shares of CVS were down 3.3% at $74.36 on Oct. 9. On Oct. 6, the chain's stock ended the day 4.9% lower.