How Could the New Amazon Health Care Company Affect Specialty Pharmacy?
New Amazon health care venture may lead to more effective specialty drug management.
Amazon, Berkshire Hathaway, and JPMorgan Chase have teamed up to launch a new health care company in an effort to provide high-quality care while reducing costs, according to a press release issued by the companies.
The new health care company will be independent and not constrained by profit-making incentives, according to the release. Instead, the initial focus will be on providing technology solutions that provide employees with streamlined, high-quality, and transparent care without profit-related constraints.
By collaborating, these 3 organizations hope to pool their resources to take an innovative and disruptive approach to health care, according to the release.
“The ballooning costs of health care act as a hungry tapeworm on the American economy,” said Warren Buffett, chairman and CEO of Berkshire Hathaway, in the release. “Our group does not come to this problem with answers. But we also do not accept it as inevitable. Rather, we share the belief that putting our collective resources behind the country’s best talent can, in time, check the rise in health costs while concurrently enhancing patient satisfaction and outcomes.”
Despite the enormous potential of the alliance, the companies acknowledge that they face major challenges in pursuing this new approach to health care, according to the release.
“The health care system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” said Jeff Bezos, founder and CEO of Amazon. “Hard as it might be, reducing health care’s burden on the economy while improving outcomes for employees and their families would be worth the effort. Success is going to require talented experts, a beginner’s mind, and a long-term orientation.”
The new effort is currently in the planning stages and is being spearheaded by top executives from each company.
“Our people want transparency, knowledge and control when it comes to managing their health care,” said Jamie Dimon, Chairman and CEO of JPMorgan Chase.
“The 3 of our companies have extraordinary resources, and our goal is to create solutions that benefit our US employees, their families and, potentially, all Americans,” he added.
Due to the preliminary nature of the company, the exact impact on the health care industry is unknown, with the potential to head in either direction.
A top question will be how the new company will address the concern of high drug costs, which will require reform of the pharmaceutical supply chain.
“Number one, look at prices. America doesn’t use more health care than European countries, but we pay a lot more and that’s because of prices more than anything else. Look at hospital prices and prescription drug prices,” Stan Dorn, senior fellow, Families USA, told Kaiser Health News. “I would also say, look to eliminate middlemen operating in darkness. I’m thinking in particular of pharmacy benefit managers. Often, the supply chain is hidden and complex, and every step along the way the middlemen are taking their share, and it winds up costing a huge amount of money.”
Additionally, these companies may develop a more effective way to manage specialty drug spending, which drives an enormous amount of health care spending. If the new entity is able to spark such a change, it could make waves throughout the specialty pharmacy industry.
“We know that 5% of any population consumes 50% of the health care dollar. I would encourage this group to focus on how to better serve those individuals who need help managing multiple chronic conditions,” Ceci Connolly, president and CEO, Alliance of Community Health Plans, told Kaiser.