After the end of Amazon Care: This is how Amazon now wants to expand in the booming healthcare sector

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• Amazon Care dissolved due to lack of profitability

• Instead, Amazon wants to advance into the booming health sector with One Medical

• Amazon is looking for acquisitions in the healthcare sector

Again and again there is talk of Amazon’s plans to advance into health care and drug delivery. It is undisputed that this area has great profit potential in view of the aging population in the USA and also in Europe. However, it has not been easy for Amazon to gain a foothold in this extremely competitive market, as the recent example of Amazon Care has shown.

Amazon Care ended at the end of August

Amazon Care is already history about two years after it was founded. Although the division of the digital giant was very popular with some of its patients, it was not possible to sell the system profitably to other corporations. In other words: It was not foreseeable if and if so when Amazon Care would become profitable. In an email to employees, Amazon Health Vice President Neil Lindsay regretted that Amazon Care “isn’t complete enough for the large enterprise customers that we were targeting.” That’s why Amazon has now dissolved its own telehealth division, and 150 employees now have to look for a new place to live – gladly continue within the Amazon cosmos, as Lindsay emphasized.

Third largest acquisition in company history: One Medical

CEO Andrew Jassy has repeatedly emphasized that he sees great growth opportunities for Amazon in the healthcare market. However, after the end of Amazon Care, the US group seems to be concentrating on acquisitions of already established health companies in the future. A particularly large acquisition was announced almost two months ago, namely by One Medical, an operator of 182 family doctor branches based in San Francisco. Valued at $3.9 billion, this is Amazon’s third-biggest acquisition after high-quality supermarket Whole Foods and movie studio MGM. However, the One Medical purchase is not yet complete, and final approval could be months away.

By taking over existing companies, the digital giant does not have to laboriously build its own health infrastructure. Ali Parsa, CEO of digital health company Babylon Health, told the Washington Post that when it comes to building a primary care service from the ground up, there are “no shortcuts.” “I’m not sure anyone can replicate this overnight,” Parsa said. “I think the acquisition of One Medical is an acknowledgment that they need to learn this.”

Further acquisitions expected

Other planned acquisitions in the healthcare sector should also be seen against this background. Amazon – along with other US companies such as United Health and CVS Health – had expressed great interest in acquiring Signify Health. Signify uses analytics and technology to facilitate home healthcare delivery. The Texas company also offers private and state health insurance plans.

However, Amazon was not able to prevail in the bidding war, instead CVS Health announced the acquisition of Signify at the beginning of September. However, Amazon should continue to look for potential acquisitions in the coming months to capitalize on the expected growth of the telehealth industry. In addition, Amazon has been offering its drug delivery service Amazon Pharmacy in the USA since 2020 and plans to further expand this division.

So it is with the Amazon share

In fact, Amazon stock could currently use new reports that stimulate growth fantasies about the tech giant. The paper has been able to rise noticeably from this year’s low in June. Nevertheless, at a current price of 117.27 US dollars (as of the closing price on September 22, 2022), the Amazon titles are well below their record high of 188.65 US dollars on July 13, 2021. Amazon was last with them fighting rising costs with a simultaneous decline in consumer sentiment. After all, the AWS cloud division continues to ensure stable earnings while growing, which, according to many analysts, should secure the price downwards.

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