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Amazon Turns Attention To The Medical Device Business

While it seems it’s only a matter of time before Amazon enters the pharmaceuticals market, one Wall Street analyst is predicting that the eCommerce giant is also looking to grow its professional medical device business.

Amazon was granted wholesale distribution licenses in several states earlier this month.  According to news from CNBC, Jefferies analyst Brian Tanquilut pointed out that Amazon’s business-to-business medical device web page was posted during the same period. So, while many assumed these licenses could be used for drugs, Tanquilut said the timing could indicate Amazon is more interested in selling medical devices online.

“[T]he out-of-state wholesaler license that AMZN filed with the state of Nevada revealed that AMZN did not select ‘Controlled Substances’ as a type of product that they would be handling,” Tanquilut wrote in a Friday research note. “While we acknowledge that there are prescription drugs that don’t fall under the definition of ‘controlled substances,’ the active decision to choose not to distribute those types of drugs leads us to believe that AMZN will not be using these licenses to distribute any prescription drugs[.]”

But Amazon is moving toward the pharmaceutical market, with Wells Fargo analyst David Maris recently revealing that AmazonRX.com redirects to the Amazon home page.

“We find it easy to envision that, if it entered pharmacy, Amazon could offer unique value to some customers, such as the easier ability to manage prescriptions and perhaps discounts, such as free generics to Prime users,” Maris wrote. Overall, we think that even though Amazon has not stated a goal to be in pharmacy, history has shown it is better to consider Amazon’s disruptive potential beforehand rather than afterward.”

As a result, CVS Health is reportedly in talks to buy Aetna, which would be an unprecedented mega-merger between a top pharmacy chain and insurer. RBC Capital Markets analyst George Hill said that the companies “needed to defend the business from encroachment by Amazon.”

An Amazon spokesperson previously told CNBC by email that the company doesn’t “comment on rumors or speculation.”

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