The prospect that Amazon will enter the pharmacy space has cast a pall over stocks of drug distributors and retail pharmacies, erasing hundreds of millions of dollars from their market value.
But in another sector of the drug space, Amazon's entry would be welcomed: pharmaceutical companies.
"Just like science is disrupted with gene therapy or novel treatments, I think the drug distribution channel also should be disrupted with improvements based on technology or efficiency," Allergan CEO Brent Saunders told analysts on the company's third-quarter conference call Wednesday.
Pfizer chief Ian Read made similar comments in an interview with CNBC on Tuesday.
"We haven't had any conversations with them [Amazon]," Read said, but we're "more than willing to talk to anybody who can ensure" the efficiency of the distribution system.
Amazon is considering an entry into the space, with a decision expected as soon as Thanksgiving. Last week, news that Amazon had secured wholesale pharmacy licenses in 12 states further fueled speculation – though experts say those licenses don't facilitate an entry into drug distribution; they support Amazon's existing business in medical equipment.
Still, conviction – or hope – runs high that Amazon is interested in pharmacy. Wells Fargo analyst David Maris, who covers drug companies, points out that the URL AmazonRx.com is registered to the Amazon Legal Department.
"We do not see the Amazon threat alleviating any time soon," wrote David Larsen and Matt Dellelo, analysts covering the drug supply chain space for Leerink, in an Oct. 31 research note. "While these licenses may be related to other health-care products and devices, in our view it is likely that Amazon will eventually get into the pharmacy services space."
Most exposed, they wrote, are retailers – CVS, Walgreens and Rite-Aid – followed by drug distributors – McKesson, AmerisourceBergen and Cardinal Health.
Others have focused on Amazon's potential to disrupt the pharmacy benefit manager – or PBM – space, which is dominated by three major players: Express Scripts, CVS Caremark and UnitedHealth's Optum.
PBMs, in addition to operating mail-order pharmacies, negotiate drug prices on behalf of insurers and employers, which can often lead to adversarial relationships with pharma companies.
"I've always thought that the current system is pretty inefficient, when you have PBMs, the pharmacy benefit managers, between the manufacturers and the ultimate users," said Joel Marcus, CEO of Alexandria Real Estate, which caters to life science companies.
If Amazon entered the space, Marcus told analysts on the company's third-quarter conference call this week, "it's going to rationalize the system."
Another biopharma CEO, speaking on the condition of anonymity, put it more bluntly: "We'd be fools not to consider anyone who can disrupt the insurance/PBM stranglehold these companies have over patients and us."
To be sure, many point out the pharmacy space is complicated and heavily regulated, which could deter Amazon from pursuing it.
"We'll see on the pharmacy side; there's a lot of regulation there, a lot of red tape," Piper Jaffray analyst Michael Olson, who covers Amazon, said on Squawk Box Friday. As an example, he pointed to Amazon's wine business.
"They're in the business of shipping wine across state lines right now, and they're looking at getting out of that, because that has too much regulation," Olson said. "So I'm not 100% convinced they're going to be getting into the pharmacy space, but we'll see."
Some in the drug industry argue that's precisely why Amazon could successfully disrupt the pharmaceutical supply chain.
"It's an area rife with inefficiency and a lot of turf," said the aforementioned biopharma CEO. "It's overly complicated; that's the opportunity."