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Which Companies Will Be Most Hurt by Amazon's Move Into Healthcare?

By Brian Orelli, PhD and Keith Speights - Apr 14, 2021 at 7:31AM

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The conglomerate has moved into prescription drug distribution and is looking at options for telehealth medicine.

Amazon.com (AMZN 3.15%) has moved into healthcare through its acquisition of PillPack and the potential of the rollout of its telehealth offering that's currently reserved for employees. In this video from Motley Fool Live, recorded on March 22, Fool.com Contributors Brian Orelli and Keith Speights discuss the effect the move into healthcare might have on competitors.

Brian Orelli: Joseph asks, he points out that GoodRx (GDRX 4.05%) seems like a more serious competition to me because the opportunity for differentiation seems more narrow for GoodRx, and then Steve asked, "Do you think GoodRx will play a role in telemedicine as the HeyDoctor telemedicine platform?"

Keith Speights: I mean, those are excellent questions, and I'll address Steve's question first and you can chime in as well, Brian. Yes, I think GoodRx will play a role in telemedicine. They do have HeyDoctor, and they've made that a big focus. Obviously, it's not their primary core business at this point, but I do think that they will beef up their efforts there, and I think they will have a chance at winning more market share.

But I also agree with what Joseph is saying here. As I mentioned earlier, I think that Amazon could be a more serious threat for some of the downstream telehealth players outside of the leaders like Teladoc Health (TDOC 4.88%) and Amwell (AMWL 2.31%). I think Amazon might just be a threat for GoodRx before all is said and done. I think that rivalry plays better into Amazon's strengths. And GoodRx is a good company, and I'm not saying Amazon is going to push them to the side or anything, but I think Amazon could be a bigger threat to GoodRx than it will be to Teladoc Health.

Orelli: Do you think discounting, or you think just because people will switch to getting their pills through Amazon and so they don't need the benefit of the discounts at pharmacies from GoodRx?

Speights: Probably the latter. But with Amazon you can never tell. You never know what they're going to do next. Who's to say that they don't see an opportunity to go even more head-to-head with GoodRx? I don't know if that will happen, but I wouldn't discount that possibility.

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Stocks Mentioned

Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$109.56 (3.15%) $3.35
Teladoc Health, Inc. Stock Quote
Teladoc Health, Inc.
TDOC
$34.83 (4.88%) $1.62
American Well Corporation Stock Quote
American Well Corporation
AMWL
$4.42 (2.31%) $0.10
GoodRx Holdings, Inc. Stock Quote
GoodRx Holdings, Inc.
GDRX
$6.16 (4.05%) $0.24

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