Apple, Google Are Jumping Into Health Care. Will Amazon Be Next?
By Dan Diamond Contributor, Forbes
The two companies’ moves have gotten plenty of buzz. (The power of the iPhone alone guarantees that Apple’s strategy will be closely scrutinized.)
There’s reason to wonder: Amazon executives recently held a meeting with top FDA officials, Darius Tahir reports in an interesting scoop for Modern Healthcare.
For now, details are sparse.
- Tahir reports that Amazon “leadership” met with FDA “leadership” one month ago.
- Only one official’s name is actually known: Howard Sklamberg, FDA’s deputy commissioner for global regulatory operations and policy.
It could mean nothing — the FDA might’ve been telling Amazon to clean up its messy prescription-drug market — or it could mean everything.
After all, when Apple executives privately met with FDA in 2013, it was a tip-off that Apple was planning to pursue the health care market. (A plan that will take effect when Apple unveils the iPhone 6 and iOS 8 in two weeks.)
What Did They Discuss?
No one from Amazon or the FDA was willing to divulge details of their conversations. But several industry observers spoke up to say the meeting suggests big moves ahead.
“It would seem to me that [Amazon] would be exploring changes in high-level policy,” Bradley Merrill Thompson, a lawyer at Epstein Becker & Green, and a member of an FDA advisory panel, told Modern Healthcare‘s Tahir.
I also reached out to my colleague Ken Kleinberg, who helps lead health IT research at Advisory Board Company. What could Amazon and FDA possibly have discussed?
Kleinberg noted that FDA oversees many potential business lines that might be relevant to Amazon’s short-term plans and long-term planning.
“It’s a complex issue,” Kleinberg said. “There are FDA regulatory distinctions between manufacturing, marketing, and selling medical devices. There are regulatory distinctions between devices used for wellness, which often aren’t regulated, and ones used for disease management.”
“And in some cases, the device itself is not the issue — it’s how it is marketed.”
Several Possible Scenarios
Like other major retailers, Amazon might be lured to health care by the promise of new Obamacare customers and the industry’s existing, often dysfunctional markets.
For instance, Walgreen took the unusual step of launching accountable care organizations — centered around three of their pharmacies — through an Affordable Care Act pilot program. And Walmart this year began rolling out its own primary-care clinics.
Compared to traditional health care organizations, companies like Walgreen and Walmart think that their expertise managing a storefront will give them an edge when it comes to patient access. And of course, a big-box store like Walmart has a physical presence that enables cross-sell opportunities, like buying medical supplies or making a visit to an on-site clinic.
Amazon can’t compete there, but the company can bring lessons to connecting with consumers and understanding their behavior — a valuable competency as many patients’ care can increasingly be managed from a distance and through a computer. Amazon also could play a bigger role in prescription-drug distribution, too.
And like Apple, Amazon does have a smartphone that could conceivably be the lynchpin of a health care strategy. (Although Amazon’s share of the market is small; it’s telling that Apple’s not-yet-released iPhone 6 has almost as much market penetration as Amazon’s currently-on-the-market Fire.)
Amazon has already launched a wearable technology store, Kleinberg notes, to sell items that include activity trackers and smart watches.
At least one expert is counting on Amazon to succeed, if they end up making a play for health care business. “Amazon is always so creative that they tend to enter markets in a big way, disrupting existing business models,” Thompson mused to Modern Healthcare.
“It will be fascinating to see whatever they have in mind.”
To be clear: Until more details are released or leaked, we don’t know why Amazon met with FDA.
Still, Kleinberg understands why any retailer might be eying health care: “The potential market is huge,” even just to sell weight-loss or cosmetic products that might not be clinically relevant.
It’s worth noting that Amazon — and its founder — already are pursuing opportunities in health care, too.
- Amazon Web Services hosts electronic health records in its cloud.
- Jeff Bezos, Amazon’s CEO, has invested in several health care companies in recent years. (For example, Bezos is a backer of Qliance, a medical clinic group where members pay monthly fees.)
Amazon also recently hired Dr. Babak Parviz, the inventor of Google Glass and the company’s “smart contact lens.” Speaking at a conference on Thursday, Parviz advocated for how wearable technologies could change the health care landscape, VentureBeat’s Mark Sullivan reports.
If Amazon does end up moving into health care, there was some ironic foreshadowing last year.
During the Healthcare.gov debacle, as patients attempted to shop for health plans and the website repeatedly crashed, there were more than a few calls for an innovative company to emerge as “the Amazon.com of health care.”
(Bezos should “buy” HHS, pundit George Will joked at one point.)
But maybe the pundits and jokesters were looking in the wrong place. Maybe the most likely contender to be “the Amazon.com of health care” … always was Amazon.