US: Amazon discusses distributing generic drugs

By Barry Eitel

SAN FRANCISCO (AA) – Amazon has spoken to several pharmaceutical companies about selling generic drugs online in the U.S., according to a report published Thursday.

Sources told the CNBC network Amazon has initiated talks with Mylan, maker of the EpiPen emergency allergy treatment, and Sandoz, a division of drugmaker Novartis.

Health care investment bank, Leerink, also confirmed in a note to investors Thursday that executives from Amazon and Sandoz “met and discussed with Amazon its plans for getting into the U.S. healthcare market.”

Shares of Mylan rose 3.34 percent to $37.75 in after-hours trading amid the news. Amazon and Novartis were also up slightly after the close of markets.

Many in the health care industry are excited about the prospect of Amazon selling drugs.

“One of the biggest problems with drug prices today is purchasers and other middle-men that add little value to the ecosystem,” biotech investor Brad Loncar tweeted about the news. “Amazon is the ultimate low-margin, efficient middle-man. Would be a good thing if they get involved.”

Sandoz, Mylan nor Amazon have commented on Amazon’s plans to enter the health care field.

Currently, AmerisourceBergen, McKesson and Cardinal Health are the biggest drug distributors in the U.S. and Amazon would likely cause major disruptions for those companies.

On Wednesday, the chief executive of the drugstore chain Walgreens said during a conference he did not think Amazon would enter the health care market because of regulatory hurdles.

“They will not come in an industry so complicated as our industry,” Stefano Pessina said.