Amazon.com Inc. reportedly intends to break into the multibillion-dollar pharmacy market.
Industry experts told CNBC that this could be a multibillion market opportunity for the e-commerce company.
In the United States alone, more than 4 billion prescriptions are ordered every year. In 2015, patients, insurance companies and other payers spent an estimated $300 billion on prescription drugs, CNBC reported.
Amazon has been holding annual meeting for the last few years to discuss whether it should break into the pharmacy market, said a source told CNBC.
The online retail giant this year is looking to hire a general manager for such a move.
The Seattle company also recently started selling medical supplies and equipment in the U.S., and is hiring for its "professional healthcare program" to ensure that the company is meeting regulatory requirements. It also hired Mark Lyons from Premera Blue Cross, who has been “tasked with building an internal pharmacy benefits manager for Amazon employees, which might be later scaled out,”
Japan Times reported in April of this year that the company expanded its Prime Now delivery service to include drug and cosmetic sales, with the support of local partners. Amazon often tests new product lines in non-U.S. markets, before it assesses whether to roll it out in the domestic market.
Amazon declined to comment, CNBC reported.
Meanwhile, this week Amazon is celebrating 20 years as a publicly listed company.
And the online retail giant certainly has lived up to its vow before it offered stock to the public.
“Amazon.com intends to use technology to deliver an outstanding service offering and to achieve the significant economies inherent in the online store model,” the company said in its IPO paperwork, the Finanical Times reported.
“It was novel at the time, now it is accepted wisdom,” Nicholas Colas, chief market strategist at Convergex, told the FT. “They ended up being the pre-eminent disrupter of retail.”
“Amazon shares, listed at $18 at the time, have produced a compound annual return of nearly 40 per cent since the initial public offering. That means, for example, that $100 invested in Amazon stock at the IPO would be nearly $64,000 today (the stock split three times, so one share at the IPO equals 12 shares now),” the FT reported.
“Up 63,990 percent since its IPO, Amazon ranks as the best-performing US-listed IPO since 1995, according to Dealogic. For context, Netflix is fourth and Yahoo is seventh and the total return on the S&P 500 in the same period is about 300 percent,” the FT said.
To put Amazon's power into perspective, it took the Seattle online retailer 18 years as a public company to catch Wal-Mart Stores in market value, but it took less than another two years for Amazon to be worth twice as much.
On the 20th anniversary of its IPO, Amazon’s market capitalization stands at $459 billion while retail rival Walmart’s is at about $228 billion, Recode reported.
Meanwhile, AFP reports that Wal-Mart, the 800-pound gorilla of retail, is running hard to catch up in an increasingly crucial segment where it is neither the biggest nor the best: e-commerce.
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