Stop me if you’ve heard this before. Amazon is planning to enter another industry. The only difference between this market compared to the others that Amazon has breached over the years is that it is not even remotely linked to technology. After announcing their new security product earlier this week, Amazon revealed their plans to enter the pharmaceutical industry. As a result, CVS is left scrambling to enhance its position in the industry to avoid an Amazon takeover; therefore, they have begun discussions with Aetna about a potential massive merger that would be worth billions.
Amazon’s Universal Takeover
Amazon started as an e-commerce platform in the 1990’s, but it is much more than that in 2017. In recent years, Amazon has ventured into a variety of technology sectors including content streaming, home security, and music streaming to name a few. They even purchased Whole Foods this year in an effort to disrupt the grocery delivery market. Now, Amazon wants to get into the pharmaceutical distribution industry, which could be a problem for companies like CVS and Walgreens.
CVS Scrambling To Survive
Speaking of CVS, the company it trying to be proactive in the fight against an Amazon takeover by partnering with Aetna, the third largest health insurer in the United States. The deal is estimated to be worth around $66 billion, and the merger could allow CVS and Aetna to utilize each other’s massive network of clients and customers. Aetna would push its millions of customers toward CVS pharmacies, clinics, and retail businesses. In turn, Aetna would be able to monitor its clients better by receiving data from CVS that would give insight into whether or not they are taking their proper medication. A merger could also allow negotiations to begin about the current cost of drug prices, opening up the possibility for customer discounts that would keep them from steering toward Amazon.