Amazon announced on Thursday it has reached an agreement to acquire primary healthcare company One Medical in an all-cash deal valued at approximately $3.9 billion, deepening its delve into healthcare.
The US-based ecommerce giant has been working to expand its operation beyond its core businesses, with a growing interest in healthcare services.
Senior vice president of Amazon Health Services, Neil Lindsay, said the company thinks “health care is high on the list of experiences that need reinvention.” adding that it hopes to be one of the companies “that helps dramatically improve the healthcare experience over the next several years.”
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One Medical operates based on membership to provide primary care service that promises customers “24/7 access to virtual care.”
The company operates in 25 major US markets and works with over 8,000 companies to offer medical services to its 767,000 members, according to its latest quarterly results.
Lindsay said Amazon believes “health care is high on the list of experiences that need reinvention.”
“We love inventing to make what should be easier and we want to be one of the companies that helps dramatically improve the healthcare experience over the next several years,” he said.
Amazon has been notably expanding its healthcare portfolio investment. The company acquired an online pharmacy PillPack for $750 million in 2018, before launching its own digital pharmacy in the United States.
In addition, Amazon has partnered with JP Morgan Chase and Berkshire Hathaway to develop Haven, an idea geared towards providing better health care services and insurance at a lower cost to workers and families at the three companies. But the effort failed last year.
Under the deal, Rubin will continue to be run by One Medical under CEO Amir Dan Rubin. The shares of one Medical’s parent, 1Life, moved up 69% to $17.13 on Thursday, just below the purchase price of $18 per share.
While the deal is still subject to regulatory approval, there is concern about private data management.
The American Economic Liberties Project in Washington said it’s unclear if Amazon will protect patients and their sensitive medical records.
“Allowing Amazon to control the health care data for another 700,000 plus individuals is terrifying,” Krista Brown, the group’s senior policy analyst, said in a statement Thursday. “Amazon has no business being a major player in the healthcare space, and regulators should block this $4 billion deal to ensure it does not become one.
The Federal Trade Commission (FTC) is working with lawmakers to enact a law that will limit big tech companies from using their financial power to acquire companies outside their core businesses. Meanwhile, Amazon and the rest are still having a field day.