While Amazon has had mighty ambitions for carving its spot in the health care industry, the tech titan is having to humble itself, a least temporarily, after stepping away from one of its plans.
According to FiercePharma and CNBC reports, Amazon Business, a branch responsible for bulk selling, was unable to negotiate a strong enough deal with hospitals to be a primary supplier, leading the company to abandon the effort for now.
FiercePharma reports one of the reasons negotiations fell through was Amazon’s lack of a “proper cold-chain logistics network,” a vital component to drug distribution.
Wells Fargo Analyst David Maris advised clients that while the plans have been scrapped for now, “we strongly suggest investors continue to pay close attention to Amazon’s actions in this arena.”
“Amazon has a history of disrupting even previously entrenched industries and business methods and its entry does not usually spell increased profit margins for its competitors,” he says.
To read the full report on FiercePharma, click here.