UBS: Amazon’s Presence In Healthcare Procurement Waning

Fewer purchasing managers in the healthcare industry are procuring goods from Amazon, according to a new survey by UBS Group and reported by on Bloomberg Wednesday (July 10).

Though hospitals reportedly plan to continue to increase purchasing volume from Amazon in the next three years, Amazon-sourced buying now makes up a smaller percentage of sourcing agreements within healthcare facilities from 11 percent last year to 7 percent. UBS surveyed 100 industry purchasing managers to calculate the findings, the report noted.

According to UBS analyst Kevin Caliendo, who published a research note earlier this week, one reason behind hospitals’ deceleration of Amazon procurement could that they are seeing “less discounting” on medical suppliers, though UBS noted that it is not clear whether Amazon discounts are not as strong anymore, or whether wholesalers have responded to competition from Amazon by offering steeper discounts.

Bloomberg said industry supply chain executives spoke at a conference last year and discussed Amazon’s position within the healthcare supply chain as still “in its infancy.” They noted that the biggest challenges for Amazon to succeed in the market are to meet healthcare buyers’ need for product tracking and tracing from vendor to buyer.

In a statement provided to PYMNTS, Amazon Business Global Healthcare Leader Chris Holt pointed to the breadth of availability of Amazon Business in the global hospital industry.

“In fact, more than half of the 100 biggest hospital systems in the US make purchases through Amazon Business,” he said. “We also serve customers from physician and dental offices to senior living and long-term care facilities who are able to drive efficiency, manage costs, and minimize risk in procurement by purchasing supplies on Amazon Business.”

Previous research by Beckers Hospital Review and Reaction Data, published last year, found nearly two-thirds of decision-makers in hospitals support Amazon’s efforts to strengthen its position in healthcare supply chains. Most also reported being familiar with Amazon’s plans to do so.

Amazon’s B2B commerce unit, Amazon Business, reportedly began visiting hospitals around the U.S. earlier last year to explore the opportunity in healthcare procurement and obtain feedback from executives and purchasing managers.

“Our goal is to be something new,” Amazon Business leader of Global Healthcare Chris Holt told the Wall Street Journal at the time. “We’ve been actively building out new capabilities and features” targeted toward the healthcare industry.