Amazon buys a medical for $3.9 billion

One Medical is a membership-based primary care service that promises customers “24/7 access to virtual care.” The company operates in more than a dozen major U.S. markets, according to its website, and partners with more than 8,000 companies that offer a Medicare health benefit to their employees.

In a statement Thursday announcing the acquisition, Neil Lindsey, senior vice president of Amazon Health Services, said the e-commerce giant thinks health care is “high on the list of experiences that need reinvention.” Lindsay added that Amazon will be one of the companies that will “help dramatically improve the healthcare experience over the next several years.”

The acquisition is the latest example of the tech giant expanding its footprint in the healthcare sector. Amazon Billback was purchasedAn online pharmacy, in 2018, was later launched Own digital pharmacy In America. Separately, Amazon partnered with JPMorgan Chase and Berkshire Hathaway in an effort to provide better health services and insurance to workers and families at the three companies, as well as other businesses. That effort, called Haven, Closed Last year.

Amazon has expanded its empire in recent years from online retail to entertainment, groceries and more, increasing its reach into consumers’ lives in the process. A medical acquisition would be one of the largest in Amazon’s history. Amazon agreed to buy grocery chain Whole Foods for $13.7 billion in 2017 and earlier this year closed an $8.5 billion deal to buy iconic Hollywood movie studio MGM.

Through a medical deal, Amazon would gain access to health care hospitals and “payer and hospital system relationships,” Evercore ISI analyst Elizabeth Anderson said in a note Thursday morning.

Headquartered in San Francisco, OneMedical has seen increased demand for its services in recent years amid the Covid-19 pandemic and the rise of the telehealth industry. within it Most recent quarterly earnings report, One Medical said its total membership was 767,000, up 28% year over year. A medical went public in January 2020.
Stocks for 1 Life Healthcare (One), the parent company of One Medical, jumped more than 65% in early trading Thursday after the announcement. Amazon stock opened relatively flat on Thursday. (CVS Health Corp and Walgreens Boots Alliance shares were slightly lower Thursday morning following the news.)

The deal is subject to approval by One Medical’s shareholders and regulators.

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Nicholas Economides, an economics professor at New York University’s Stern School of Business, said he doubts the deal will prompt more formal antitrust scrutiny. He compared the One Medical acquisition to Amazon’s earlier purchase of Whole Foods, saying Amazon’s pre-existing market share in both industries was small at the time of the respective deals. Traditionally, antitrust regulators have closely scrutinized mergers that could eliminate a competitor from the same market, but rarely object to deals where a company enters an adjacent industry.

“The case for intervention in this case is even weaker than for Whole Foods because to some extent Amazon is a marketplace for food sales, so to a lesser extent it was a competitor to Whole Foods,” Economides said. “Here, I don’t see Amazon having a significant business in healthcare.”

However, some tech industry critics were quick to raise concerns about the deal and the data the company would have access to.

“Amazon’s backdoor access to private health data is frankly a terrifying thought, and calls to mind how desperate Congress must pass reform to prevent these tech giants from abusing their monopoly power,” said Sacha Haworth, executive director of the Technology Oversight Program. The advocacy group said in a statement to CNN Business.

While Amazon’s latest deal doesn’t raise red flags under a traditional antitrust rubric, the announcement comes as officials at the Federal Trade Commission, the Justice Department and Congress sounded a tough note on big tech platforms, vowing to be more creative and aggressive. – About enforcement of competition law. Some U.S. lawmakers are pushing to rush through a bill that could impose new barriers between tech giants’ different types of businesses, preventing them from using their massive scale in many verticals that critics say harms competition.

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CNN’s Brian Fung contributed to this report.

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