Health and Science

Cramer, citing sources, says the Bezos-Buffett-Dimon venture looks to cut out drug distributors

Key Points
  • A deal between Walgreens and AmerisourceBergen may not be the best move, CNBC's Jim Cramer says.
  • Cramer says, according to sources, that the recently announced Amazon, Berkshire and J.P. Morgan venture aims to cut out drug distributors.
  • That could really squeeze companies like Amerisource, Cardinal Health and McKesson, Cramer says.
Cramer says the Bezos-Buffett-Dimon venture looks to cut out drug distributors

The newly announced health-care venture from Jeff Bezos, Warren Buffett and Jamie Dimon could render any deal between Walgreens Boots Alliance and AmerisourceBergen useless.

CNBC's Jim Cramer said Tuesday, according to sources, that Bezos' Amazon, Buffett's Berkshire Hathaway and Dimon's J.P. Morgan aim to cut out drug distributors like Amerisource, Cardinal Health and McKesson.

"Jeff Bezos believes he can lower the price of health care," Cramer said on "Squawk on the Street." "He can become even more dominant and really eviscerate some of the competitors."

"[Walgreens] may not be as smart as they think they are" considering Amerisource, Cramer said. "These companies are going to be squeezed by that [Bezos] venture and squeezed by others that have to compete."

Jeff Bezos, Warren Buffett and Jamie Dimon.
Getty Images (l) | CNBC (c-r)

Late Monday, The Wall Street Journal reported that Walgreens approached Amerisource about buying the three-quarters of the firm it doesn't already own. Amerisource shares skyrocketed more than 25 percent after-hours Monday, and were up more than 8 percent late morning Tuesday.

Despite being a possibly risky move for Walgreens, Cramer said it's a great time for Amerisource to sell itself.

"I would sell" because Amazon "wants to cut out the middleman," said Cramer, host of "Mad Money."

Amazon has made other attempts to enter the health-care industry. CNBC has previously reported the e-commerce giant was in talks with generic drugmakers about a potential entry into the pharmacy space.

The Journal reported Tuesday that Amazon is gearing up to launch a larger offering in the medical supplies business, sending shares of health-care supplier and services companies McKesson, Cardinal Health and Owens & Minor lower.

None of the companies mentioned were immediately available to respond to CNBC's request for comment.