Amazon.com Inc is planning to launch pharmacies in the United States. This is triggering a drop in shares of drugstore chain operators CVS Health and Walgreens.An Amazon spokesperson said the company does not comment on rumor or speculation. The spokesperson also added that Amazon Pharmacy is focused on making at-home delivery pharmacy easier and more convenient for customers.
Mizuho analyst Ann Hynes said the sell-off in drugstore company’s shares was overdone as Amazon plan to enter the pharmacy business was not new, and adding physical location is likely a natural progression. Hynes said that they think launch of pharmacies will initially be focused on locations located in Whole Foods stores, similar to the Target and Walmart model.
Amazon.com Inc was an online bookseller, has disrupted multiple industries comprising retail and technology. This move into the physical pharmacy space will pit it directly against established players. Shares of Walgreens, CVS and Rite Aid were all down between 1% and 3% on Wednesday.CVS declined to comment on the report, while Walgreens and Rite Aid did not immediately respond to Reuters’ requests for comment. The Shares of drug distributors McKesson Corp, Cardinal Health Inc and AmerisourceBergen Corp were marginally lower.