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NEW YORK — Amazon Business, which sells bulk goods to business customers, has reportedly scrapped plans to distribute prescription drugs to hospitals.
Instead of distributing pharmaceuticals, the network said the e-tailer will keep selling less regulated medical supplies to hospitals and smaller clinics — a business which it has found to have unexpected challenges. The shelving of the hospital distribution plan was reported by CNBC , which cited anonymous sources.
The setback reveals the hurdles to getting into drug distribution, even for a player as large as Amazon. The company dropped the plan in part because of being unable to persuade big hospitals to change their traditional buying process, CNBC reported. And Amazon would need to establish a more sophisticated distribution network that can ship temperature-sensitive drugs.
Still, the online retailer hasn’t given up on the idea of eventually getting into drug distribution. Speculation is still strong that the company will at some point launch a direct-to-consumer prescription drug business.
The retreat from hospital distribution follows the announcement that Amazon, Berkshire Hathaway and JPMorgan Chase & Co. will form an independent, nonprofit health care company to provide their employees better and more affordable health care. While details remain sparse, the initiative is considered a long-term effort that will focus initially on developing technology solutions to improve the quality and reduce the costs of health care for the participants’ employees.
