Drug chains tumble on reports Amazon eyeing their pie

Technology


(Reuters) – Shares of drug retailers Walgreens Boots Alliance Inc (WBA.O), CVS Health Corp (CVS.N) and Rite Aid Corp (RAD.N) tumbled on Friday after reports that Amazon.com Inc (AMZN.O) was looking to make a move into selling drugs online.

Amazon is reported to be in discussions with mid-market pharmacy benefit managers and has been hiring talent to assess the drug retailing market for its entry, brokerage firm Leerink analyst Ana Gupte wrote in a note to clients.

“We are convinced that AMZN will almost certainly enter the drug distribution value chain within 2 years, evolving into a more disruptive offering over time,” Gupte said.

Amazon’s entry into pharmaceuticals has been long rumored in the media.

On Friday, CNBC reported that the e-commerce giant would decide before Thanksgiving whether to move into selling prescription drugs online, citing a company email and a source familiar with the matter. (cnb.cx/2hTIxvL)

Amazon does not comment on rumors or speculation, a company spokeswoman said.

Shares of drug retailers Walgreens closed down 5.8 percent, Rite Aid 4.9 percent and CVS Health 4.9 percent.

Reporting by Munsif Vengattil in Bengaluru; Editing by Anil D’Silva

Our Standards:The Thomson Reuters Trust Principles.



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