"Amazon could break open
For Kraus, Amazon's potential move into the pharmacy space, which CNBC reported on Tuesday, is not surprising. In his view, every major technology company should have a play in health care, an estimated $3 trillion sector.
For Amazon, the obvious move is to sell prescription drugs online.
In the wake of the news, shares of pharmacy stocks such as CVS and Walgreens Boots Alliance opened lower. But industry experts think these companies aren't the only ones that should be worried about Amazon's entrance into
Kraus thinks it could be a blow to a slew of on-demand drug delivery startups, such as New York's Zipdrug. The pharmacies themselves might also face some new competition, including the big players and the "mom and pop" stores, he said.
"Look at what Amazon has done to malls," Kraus added. "In the future, when people say they're going to a Walgreens or CVS, they might instead choose to go to Amazon.com."
Others say it could be a threat to the pharmacy benefits managers, such as Express Scripts and CVS, which control consumer access.
But TJ Parker,
Amazon could start small, by targeting consumers without insurance or high-deductible plans. It might borrow the model of a company like GoodRx, which often quotes far lower prices on prescription drugs that pharmacies will often charge out-of-pocket.
But Kraus suspects that Amazon will go bigger than that. The company "might crawl, walk and then run," he says, but ultimately he predicts that if it does move forward, it won't restrict itself to one part of the chain. Instead, Amazon could work directly with manufacturers, become a distributor like McKesson, take on the role of a pharmacy benefits manager by negotiating discounts and sell drugs to patients as a licensed pharmacy.
He even suspects that Amazon could get more competitive prices on
"In Amazon style, it will want to own the consumer's mind and wallet," Kraus adds.
In other words, go big or go home.
Watch: Why wouldn't Amazon go into pharmaceuticals?
