E-commerce mogul, Amazon has met with the makers of certain generic drugs to discuss the company’s potential entry into the pharmacy sector.
The discussions include pharmaceutical giants such as Mylan and Sandoz, which is a unit of Novartis. Sources state that the nature of the discussions have been extremely secretive and Amazon’s future plans remain a bit unclear.
However, despite the secrecy shrouding the deal, Mylan’s shares saw a 205 percent hike in the after-hours trading.
The mystery deal was confirmed by the health care investment bank Leerink, which sent a note to its investors on Thursday.
The note indicated that Sandoz’ Peter Goldschmidt had “met and discussed with Amazon its plans for getting into the U.S. healthcare market”. The meeting is rumored to have taken place at a recent biopharma event, which saw both companies in attendance.
However, the note did not clarify whether Amazon was looking to enter the market as a wholesaler, or was looking to sell generic medications as a mere retailer. Sources have also stated that the conversations could be more about Amazon taking on a role in drug purchasing.
If these sources are to be believed, the move could potentially disrupt the monopoly of other distributors like McKesson, AmerisourceBergen, and Cardinal Health.
The source added that these businesses were likely to take a beating since most generic manufacturers had expressed a strong interest in working with Amazon as part of their upcoming 2018 business plans.
Sandoz, however, remained unaffected by this encroachment and stated that it does not expect Amazon to have a “major impact” on its business dealings. Sandoz may be the only company viewing Amazon’s advent with indifference.
Others have already started sounding the alarm, afraid of what their own earning will be once the e-commerce heavyweight enters the fray.
Many are hopeful that Amazon will decide against competing in the pharmaceutical sector.