Amazon[1] has been growing its medical supply business - selling gloves, syringes and other healthcare sundries to dentists, doctors and hospitals - in an early sign of its efforts to enter the healthcare industry[2].
Unlike Amazon's secretive plans to shake up the prescription drug industry, or its initiative to develop technology tools to rein in health costs for its own employees, Amazon hasn't hid this effort. In an earnings call in October, an executive mentioned hospitals first on a laundry list of institutions that it was targeting with its Amazon Business[3] offering, along with schools, labs and government agencies.
On Tuesday, the stocks for companies that distribute medical supplies tumbled after the Wall Street Journal reported[4] that Amazon has been holding meetings with hospital executives to learn more about the needs of the industry.
Brian Tanquilut, an equity analyst at the investment firm Jefferies, said Amazon's play to sell commodity medical supplies, such as medical gowns and masks, has been going on for some time. It is seen as a good entry point to healthcare because it doesn't involve complex regulatory approvals; many states don't require a license at all. Amazon has been particularly aggressive, he said, in courting dentists, setting up booths at dental conferences.
"They see healthcare as a very big market; it's one of the growth markets in the economy that they do not have a toehold in. They look at areas where it's relatively easy to get into without high-level government level scrutiny, and this is kind of the low-hanging fruit, in healthcare entry," Tanquilut said.
An Amazon spokeswoman did not answer questions about how much of its business marketplace sales include medical products, but there are 1...