After initial efforts to enter the pharmaceutical space, Amazon has decided to focus on selling less-sensitive medical supplies to hospitals and small clinics. The strategy comes in part because Amazon Business, which sells in bulk to business customers, has not been able to break into traditional purchasing networks.
“The hospital and health-care systems have entangling alliances with their existing purchasing and supply chain partners,” Tom Cassels, head of strategy and business development at Leidos Health, told CNBC. “It’s very difficult to replicate the Amazon buying experience in health care.”
Amazon would also need to build logistics infrastructure to handle temperature-sensitive products. Pharmaceutical products that require refrigerated storage and transport were worth around $283 billion in 2017, according to Pharmaceutical Commerce magazine.
Source: CNBC, April 16, 2018.