Amazon’s deal to purchase One Medical for $3.9 billion a test for US lawmakers and regulators who have vowed to rein in power of big tech
Amazon has announced plans to buy San Francisco healthcare provider One Medical for $3.9 billion (£3.24bn), in a deal that is likely to prove a test for regulators and lawmakers, many of whom have stated they want to rein in the market power of the biggest tech companies.
The all-cash arrangement is intended to further the company’s moves into the medical industry, which date back more than 20 years.
The e-commerce giant said last week it would pay One Medical shareholders $18 per share, more than a 75 percent markup on its closing price on Wednesday. One Medical shares closed up 69 percent on Thursday following the news.
US senator Amy Klobuchar said she was calling on the Federal Trade Commission (FTC) to “thoroughly investigate” the deal, citing Amazon’s previous investments in healthcare and the implications of the company’s access to medical data.
Asked by The Washington Post in June about Amazon’s expansion into health care, FTC chair Lina Khan said, “Our current approach to thinking about mergers still has more work to do to fully understand what it means for these businesses to enter into all these other markets and industries.”
Amazon was a major investor in Drugstore.com, a start-up that launched in 1999 and was acquired by US pharmacy chain Walgreens in 2011, and more recently bought prescription delivery firm PillPack in 2018 before launching its own Amazon Pharmacy subsidiary in 2020.
One Medical offers a subscription-based model where users pay a monthly fee to have access to doctors, including, but not limited to, virtual appointments.
The company went public in early 2020 and its share price soared during the early phases of the coronavirus pandemic, but those shares are now trading below their initial listing price.
“We think healthcare is high on the list of experiences that need reinvention,” said Amazon Health Services senior vice president Neil Lindsay in a statement.
“We love inventing to make what should be easy easier and we want to be one of the companies that helps dramatically improve the healthcare experience over the next several years,” he said.
One of Amazon’s biggest rivals in combining technology and health care is Google, which acquired fitness tracking company Fitbit last year.
London-based AI company DeepMind, which Google bought in 2014, operates a health care division that was absorbed into Google Health in 2019.