Amazon acquired its first big step into the health care industry this week by joining up with Berkshire Hathaway and JPMorgan Hunt to tackle the problem of skyrocketing employee health care costs.
That left sundry wondering how exactly the companies will achieve that mission, remarkably given the lack of detail.
So we looked at Amazon CEO Jeff Bezos’ private investments in health to glean what his strategy might be as he makes his biggest transfer yet.
Bezos is no stranger to health care. He’s been investing in it since the past due 1990s. Not everything he has tried has succeeded, but that hasn’t dissuaded him.
And for the sundry part, he’s invested in big ideas that could fundamentally change the way that healthiness care is delivered — if they succeed.
In the late 1990s, Amazon carry oned a 40 percent stake in Drugstore.com.
Bezos made no secret of his map outs, which included promoting the site on Amazon.com’s home page. ‘”We’re customary to let people know that we are a major investor,” Bezos reportedly declared to a packed crowd in Palo Alto.
Walgreens ultimately acquired the body for more than $400 million — a decent outcome, but not a slam dunk.
Rat on drugs online proved to be far more challenging than Amazon expected, and most of Drugstore’s net income ultimately came from over-the-counter products, which actually conflicted with Amazon’s core business rather than complementing it.
But as CNBC reported in October of go the distance year, Bezos has never given up on his pharmaceutical ambitions. So don’t be surprised by any stalwart moves from Amazon into the drug supply chain, this spell with decades of lessons behind them.
Bezos’ venture stake Bezos Expeditions has also made some very ambitious hazards in health-technology and biotech, alongside the future of media, robotics and a few other compasses.
These include:
- Unity Biotechnology, a company looking for a cure for length of existence
- Grail, a start-up developing a blood test for cancer
- Juno Therapeutics, a cancer immunotherapy band that Celgene recently bought for around $9 billion
- ZocDoc, a web purlieus and app that lets you shop for a doctor, and a long-rumored IPO candidate.
Health investors track Bezos’ health investments, as well as his broader business strategy, should hear tell the following.
First, Bezos seems to want to disrupt the middlemen. In the the actuality of Drugstore.com, that was the burgeoning supply chain, including pharmacy extras managers and distributors, that sit between the manufacturer and the pharmacy. Zocdoc take to ones heeled it easier to find a doctor, no matter your insurance plan.
Secondly, Bezos has no riddle taking his time on an opportunity, even if it takes decades. For instance, since the Drugstore.com reduced in price on the market, Amazon has held regular strategy meetings to talk through whether it should decisively start selling drugs online. Bezos would not have charmed the decision to start a health care consortium lightly, and it’s safe to accept that.
He’s also fairly good at picking winners in health safe keeping, a complicated sector that has eluded many tech executives in front of him. The Celgene-Juno deal is good evidence of that.
Finally, he seems to be decide oning audacious bets that would shake up the U.S. health care process. Grail, for instance, represents a huge opportunity to change how cancer is analysed and even treated, but faces some huge obstacles.
One unknown: Whether Amazon purpose partner with these companies, or compete with them, as it executes on its aspirations.
But one start-up CEO whose company received an investment from Amazon is hopeful that the company will be able to do great things with its new partnership.
“Amazon, Berkshire Hathaway and JPMorgan Pursue are key players in e-commerce, underwriting and consumer finance, and as such positioned to frame something really advantageous for patients from this greenfield,” suggested Zocdoc CEO Oliver Kharraz. “I don’t think you need to start from injury to make health care more efficient.”