Amazon shelves plan to sell to hospitals, drug distributors rally

The headquarters of Cardinal Health in Dublin, Ohio.

Jay Laprete | Bloomberg | Getty Images

The headquarters of Cardinal Health in Dublin, Ohio.

Drug distributor in addition to also drugstore stocks rose after CNBC reported Amazon Business has shelved a plan to sell drugs to hospitals.

Amazon Business, which sells bulk items to business customers, scrapped the plan after considering of which last year, according to people familiar with the matter.

Shares of McKesson in addition to also Cardinal Health both rose more than 3 percent, while AmerisourceBergen rose 2.2 percent. McKesson’s stock has been relatively flat over the past year, while Cardinal’s stock has slid 25 percent. AmerisourceBergen is usually off about 3 percent over the past year.

Drugstore chain Walgreens Boots Alliance gained 3.7 percent, while CVS Health in addition to also Rite Aid surged 4.2 percent in addition to also 1.7 percent respectively.

Distributors of pharmaceuticals in addition to also medical supplies have been viewed as being possibly the most vulnerable to Amazon’s entry into health care. Amazon has mastered logistics in addition to also shipping for everyday products such as toilet paper in addition to also cleaning supplies, worrying some the company could do the same with drugs in addition to also medical supplies.

Others, however, have said those fears are overblown because the hurdles might be too high for even mighty Amazon to overcome.

Part of Amazon’s decision comes by its inability to persuade hospitals to change their current purchasing practices in addition to also its need to build a more sophisticated logistics network, the people told CNBC.

— CNBC’s Eugene Kim in addition to also Christina Farr contributed to This kind of report.

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