Amazon announced on Thursday that it has reached a deal to acquire One Medical, a San Francisco-based network of primary care clinics, in a deal totaling $3.9 billion.
The deal marks another major Amazon incursion into the healthcare market in new chief executive Andy Jassy’s first major acquisition since taking the reigns from founder Jeff Bezos last year.
“We think health care is high on the list of experiences that need reinvention,” Neil Lindsay, senior vice president of Amazon Health Services said in a company statement announcing the deal. “Booking an appointment, waiting weeks or even months to be seen… we see lots of opportunity to both improve the quality of the experience and give people back valuable time in their days.”
Amazon has been making aggressive plays in healthcare for a number of years. In 2018, the company struck a $753 million deal to acquire the perscription drug start-up PillPack. A year later, it launched Amazon Care — a primary and urgent care service to treat Amazon employees. Amazon Care is mainly based on virtual and home visits with providers rather than visits to a physical offices, though the service has recently been increasing its brick and mortar presence.
Amazon has attempted in the intervening years to get other employers to adopt Amazon Care as well, but with little success. One Medical, which went public two years ago, works in a similar space: it provides virtual and in-person visits with providers, contracting both with employers and individual people.
One Medical currently has some 8,500 employers signed up to go along with individual customers. Its chief executive, Amir Dan Rubin, will continue with the company following the completion of the acquisition.
“The opportunity to transform health care and improve outcomes by combining One Medical’s human-centered and technology-powered model and exceptional team with Amazon’s customer obsession, history of invention, and willingness to invest in the long-term is so exciting,” Mr Rubin said in the Amazon statement. “There is an immense opportunity to make the health care experience more accessible, affordable, and even enjoyable for patients, providers, and payers.”
Amazon is paying $18 per share of One Medical, which comes out to nearly $4 billion. The multinational’s incursion into the healthcare industry may threaten established brands like Walgreens Boots Alliance and CVS Health, which saw the price of their shares drop slightly on Tuesday.
If Amazon does continue to build its presence in healthcare, the result could be lucrative for a company that already made nearly $500 billion last year. The US spends more money per capita on healthcare than any other developed nation despite seeing some of the worst outcomes.