Amazon buys One Medical for $3.9 billion as it expands into healthcare

One Medical is a membership-based primary care service that promises customers “7×7 access to virtual care.” The company operates in dozens of major US markets, according to its website, and works with more than 8,000 companies to deliver One Medical’s health benefits to its employees.

In a statement Thursday announcing the acquisition, Neil Lindsey, Amazon’s vice president of health services, said the e-commerce giant believes “health care is high on the list of experiences that need to be reinvented.” Lindsey added that Amazon hopes to be one of the companies “that will greatly help improve the healthcare experience over the next several years.”

The acquisition is the latest example of the tech giant’s expansion into healthcare. Amazon Acquired PillPackan online pharmacy, in 2018 and later launched Private digital pharmacy in the United States of America. Separately, Amazon has partnered with JP Morgan Chase and Berkshire Hathaway in an effort to provide better health care and insurance services at lower cost to workers and families at the three companies, and possibly others as well. This effort, called Haven, close last year.

Amazon has expanded its empire in recent years from online retail to entertainment, groceries and more, increasing its broad reach into consumers’ lives in the process. The acquisition of One Medical will be one of the largest acquisitions in Amazon history. Amazon agreed to buy grocery chain Whole Foods in 2017 for $13.7 billion, and earlier this year closed an $8.5 billion deal to buy popular Hollywood film studio MGM.

With the One Medical deal, Amazon will gain access to physical health clinics and “the relationships between the payment system and the hospital,” Evercore ISI analyst Elizabeth Anderson said in a Thursday morning note.

Headquartered in San Francisco, One Medical has seen an increase in demand for its services in recent years amid the Covid-19 pandemic and the rise of the telehealth sector. in that Latest Quarterly Earnings ReportOne Medical said it had a total member count of 767,000, up 28% year over year. One Medical was launched to the public in January 2020.
arrow for 1 Live Healthcare (ONEME), the parent company of One Medical, jumped more than 65% in early trading Thursday after the announcement. Amazon stock opened relatively flat Thursday. (Shares of CVS Health Corp and Walgreens Boots Alliance fell slightly Thursday morning after the news.)

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

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Nicholas Economides, professor of economics at New York University’s Stern School of Business, said he doubted the deal could lead to more formal antitrust scrutiny. He compared the acquisition of One Medical to Amazon’s earlier purchase of Whole Foods, saying that Amazon’s pre-existing market share in both areas was fairly small at the time of the deals in question. Traditionally, antitrust regulators have screened for mergers that might eliminate a competitor from within the same market, but they have rarely objected to deals in which a company makes its way into a neighboring industry.

“The reasons for intervention are weaker in this case than in Whole Foods, because Amazon is to some extent a marketplace for selling foodstuffs, so it was somewhat of a competitor to Whole Foods before the merger,” Economides said. “Here, I don’t see Amazon as having a significant healthcare business.”

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

Sasha Haworth, executive director of the Technology Oversight Project, said: “Amazon gaining back-door access to private healthcare data is frankly a terrifying idea and calls to focus on how urgently Congress needs to pass antitrust reform to prevent tech giants from abusing their monopoly power. “. An advocacy group, told CNN Business in a statement.

While the latest Amazon deal may not raise red flags under a traditional antitrust heading, the announcement comes as officials at the Federal Trade Commission, the Department of Justice and Congress issued a tougher note on big tech platforms and vowed to get more creative — and aggressiveness. On the application of competition law. Some US lawmakers are urgently pushing to pass a bill that would erect new barriers between the tech giants’ different lines of business, preventing them from using their massive reach in multiple sectors as the kind of power multiplier that critics say is hurting competition.

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CNN’s Brian Fong contributed to this report.

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