Their new, independent healthcare company will be “free from profit-making incentives and constraints.”
Fed up with the high costs and poor outcomes associated with the existing healthcare system, Amazon, Berkshire Hathaway and JPMorgan Chase announced that they will be launching an independent healthcare company that will initially focus on “technology solutions that provide “simplified, high-quality and transparent healthcare at a reasonable cost.”
Earlier in January, Amazon posted a job for an “experienced HIPAA professional.” There is speculation that the conglomerate will enter into the drug distribution market.
Although the three companies do not claim to have answers to the complex problem of healthcare, they are no longer sitting by quietly. “The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty. Hard as it might be, reducing healthcare’s burden on the economy while improving outcomes for employees and their families would be worth the effort,” said Amazon Founder and CEO Jeff Bezos.
Berkshire Hathaway Chairman and CEO Warren Buffett added: “Our group does not come to this problem with answers. But we also do not accept it as inevitable. Rather, we share the belief that putting our collective resources behind the country’s best talent can, in time, check the rise in health costs while concurrently enhancing patient satisfaction and outcomes.”
The three companies, according to JPMorgan Chase CEO Jamie Dimon: “will create solutions that benefit our U.S. employees, their families and, potentially, all Americans.
What does this mean for the pharmaceutical industry? Analysts have differing opinions. Some don’t believe it will have much impact on the drug distribution industry and that Amazon is not interested in becoming a major pharmaceutical retailer or a distributor—others aren’t so sure.
The new company must overcome challenges such as obtaining required licensing and managing controlled substances and specialized products. With people such as Marvelle Sullivan Berchtold, a JPM Managing Director and former Global Head of MA& at Novartis, as part its leadership team, others believe the new firm will have the capability to influence industry dynamics.
Analysts also disagree about potential partnerships that Amazon might make to enter the pharmaceutical market, with some believing it will choose a pharmacy benefits manager (PBM) or a generics company.