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Amazon Sets Off Alarm Bells With ‘Dangerous’ $3.9 Billion Bid to Buy Healthcare Chain

In a move described by some political figures and privacy advocates as “dangerous,” Amazon said it agreed to a $3.9 billion all-cash deal to buy One Medical, a San Francisco-based private health services provider.

If completed, the deal will give Amazon access to One Medical’s 188 primary care practices and its 767,000 members, who pay approximately $200 in concierge fees annually to access the provider’s services, CNBC reported.

Amazon also will acquire One Medical’s subscription telehealth service, in-house electronic health-record system and established contracts with employers who hire One Medical to provide healthcare services to their employees.

The One Medical transaction represents Amazon’s third-largest acquisition, following Whole Foods ($13.7 billion) and MGM Studios ($8.5 billion).

One Medical reported a net loss of $90.9 million for the quarter ending March 31, according to its most recent filing with the U.S. Securities and Exchange Commission.

Amazon and One Medical said the deal reflects their shared objective to “reinvent” healthcare.

Neil Lindsay, Amazon’s senior vice president of health services, told The Washington Post — owned by Amazon founder and executive chairman Jeff Bezos — that “we think healthcare is high on the list of experiences that need reinvention.”

Lindsay added:

“We love inventing to make what should be easy easier and we want to be one of the companies that helps dramatically improve the healthcare experience over the next several years.”

One Medical CEO Amir Dan Rubin — who will continue to run the company after the purchase is finalized — described the deal as presenting “an immense opportunity to make the healthcare experience more accessible, affordable, and even enjoyable.”

The One Medical deal is Amazon’s latest in a string of acquisitions and partnerships focused on the tech giant’s rapidly expanding healthcare division.

It also signals Amazon’s ongoing attraction to the healthcare sector, which accounts for approximately one-fifth ($3.8 trillion) of all spending in the U.S.

Not everyone sees the deal as a positive “opportunity” for healthcare consumers —  including some members of Congress and advocacy groups who cited antitrust considerations, others who raised privacy concerns and suggested the deal could undermine Medicare.

Amazon ‘has a history of engaging in business practices that raise serious anticompetitive concern’

Amazon’s purchase of One Medical is subject to the normal regulatory approval process, according to The Lever.

But the deal immediately raised red flags among some members of the U.S. Senate, including Sen. Bernie Sanders (I-Vt.), who demanded the U.S. Department of Justice reject Amazon’s acquisition of One Medical.

Written By Michael Nevradakis, Ph.D.

BIG PHARMA › NEWS

July 28 2022

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