Drug players’ shares spike on report that Amazon no longer plans to sell pharmaceuticals

Shares of U.S. drug system players spiked in Monday afternoon trade, after a CNBC report that mammoth online retailer Amazon.com Inc. no longer plans to sell and distribute pharmaceutical drugs.

That decision is specifically for its Amazon Business unit, which sells health products like medical supplies to hospitals, doctor’s offices and more. The unit has considered adding pharmaceuticals to the list since last year, CNBC reported, citing people familiar with the matter.

But other Amazon AMZN, +0.44%  units could still get into the drug business, which could translate into drugs sold to consumers, said CNBC, and Amazon Business could eventually reconsider pharmaceuticals.

Read: Amazon is pressuring drug stocks without lifting a finger

Shares of companies in the pharmaceutical supply chain, that negotiate drug prices, distribute drugs and sell them directly to consumers, rose sharply in heavy Monday afternoon trade. Walgreens Boots Alliance WBA, +3.77%  stock rose 6%, CVS Health Corp. CVS, +4.93% climbed 8%, Cardinal Health CAH, +3.34%  stock was up 6%, Express Scripts Holding ESRX, +0.98%  shares rose 2%, AmerisourceBergen Corp. ABC, +2.38%  was up 3%, McKesson Corp. MCK, +3.68% gained 5% and Rite Aid Corp. RAD, +1.79% rose 7%. Amazon shares rose 0.9%.

Related: Amazon ignored FDA requests for more than a decade and There’s a surprisingly messy backstory to Amazon’s health care quest

The threat of Amazon’s crushing market power has weighed on pharmaceutical stocks for nearly a year, with speculation of a service allowing consumers order medication via Alexa, with two-day Amazon Prime delivery.

See: Is Amazon getting into the pharmacy business? This is what you need to know

Wall Street analysts have described the possibility as an overhang on the sector amid a relatively benign regulatory environment.

Amazon’s health care venture with Berkshire Hathaway BRK.A, +0.83% BRK.B, +0.89%  and JPMorgan Chase JPM, +0.36% also sent various company shares tumbling earlier this year.

Read: Here’s what we actually know about the Amazon, Berkshire and J.P. Morgan health initiative (hint: very little)

According to the CNBC report, Amazon Business made its decision for two key reasons: It has not succeeded in getting big hospitals on board, while developing a distribution model for temperature-sensitive drugs has been another challenge.

An Amazon spokesperson declined to comment to MarketWatch, citing the company’s policy of not commenting on “rumors or speculation.”

But in a statement, the spokesperson noted that Amazon Business is hearing from manufacturers and customers that they want ways to make it easier to buy supplies and reduce costs.

Amazon shares have declined 0.2% month-to-date, compared with a 3% rise in Walgreens shares, a 9.5% rise in CVS shares and a 1.7% rise in the S&P 500 SPX, +0.83%

Filed in: Top News Tags: 

You might like:

Tesla revives popular customer-referral program Tesla revives popular customer-referral program
The Wall Street Journal: MoviePass owner names interim CFO The Wall Street Journal: MoviePass owner names interim CFO
The physical and financial costs of school sports — and the potential lucrative rewards The physical and financial costs of school sports — and the potential lucrative rewards
Elon Musk reportedly calls on all Tesla workers to help with end-of-quarter delivery crush Elon Musk reportedly calls on all Tesla workers to help with end-of-quarter delivery crush
The Wall Street Journal: NFL paid less than $10 million to settle Colin Kaepernick collusion case The Wall Street Journal: NFL paid less than $10 million to settle Colin Kaepernick collusion case
The Wall Street Journal: Pinterest speeds up IPO plans, could list by mid-April The Wall Street Journal: Pinterest speeds up IPO plans, could list by mid-April
Personal Finance Daily: Why Theranos founder Elizabeth Holmes may have faked a low voice and how Apple convinced us that AirPods aren’t ridiculous (anymore) Personal Finance Daily: Why Theranos founder Elizabeth Holmes may have faked a low voice and how Apple convinced us that AirPods aren’t ridiculous (anymore)
NewsWatch: Here’s how the Mueller report could roil the stock market NewsWatch: Here’s how the Mueller report could roil the stock market

Leave a Reply

Submit Comment
© 2019 Stock Investors News. All rights reserved. XHTML / CSS Valid.