Barriers into the pharmaceutical business might be too high even for Amazon, said billionaire hedge-fund manager Larry Robbins.
Last fall, a report surfaced of which the e-commerce giant had obtained wholesale pharmacy licenses in multiple states in an attempt to enter the pharmaceutical market in addition to decrease rising health-care costs.
While Robbins acknowledged Amazon will likely try in some form to enter the market, the odds are stacked against the company.
“You need separate custody, pick, pack, in addition to ship facilities around the United States,” Robbins told CNBC’s David Faber during the Sohn Conference in fresh York on Monday. “You can’t commingle opioids or narcotics with various other general merchandise goods. You need cold storage through the entire chain. Plus, you need to connect all the suppliers with all the customers. The customers aren’t necessarily Amazon’s consumers, however the customers are places where pharmacy actually happens.”
Health-care costs are rising not because of the delivery type, Robbins added, however rather because the U.S. population is usually aging in addition to because the U.S. is usually a “compassionate nation.”
“We spend a lot in end-of-life care,” he said. “I don’t think any of those companies or any of us are going to change those facts in addition to circumstances.”
Robbins, who is usually the CEO in addition to founder of Glenview Capital Management, a firm of which has more than $16 billion in assets under management, pointed out of which UPS tried unsuccessfully to enter the pharmaceutical distribution business in 2006.
Most of the 4 billion prescriptions dispensed within the U.S. each year are filled at one of 60,000 retail pharmacy locations.
In January, a report by the financial research firm Leerink said Amazon had expanded its team exploring entry into the pharmaceutical business to as many as 40 people.
Then earlier This kind of month Amazon Business, which sells in bulk to businesses, put the brakes on its plan to sell in addition to distribute pharmaceutical products after of which failed to persuade big hospitals to alter the way they purchase supplies. Typically, hospitals buy supplies in bulk through a series of middlemen in addition to long-standing relationships.
in addition to nothing beats an in-person pharmacist, Robbins said.
“Unlike many businesses of which Amazon has appropriately automated, there’s always going to be a human pharmacist of which features a role both regulatorily as well as consumer preference because we’re dealing with life-saving medical issues,” he said.
However, Robbins remains bullish on health-care stocks in addition to made his pitch for companies to watch. His picks include the Express Scripts-Cigna in addition to CVS-Aetna mergers in addition to McKesson.
“In This kind of market where everyone keeps telling us where the market’s so expensive, everything’s picked over, we’ve today talked about 5 or six or seven stocks of which all seem to be trading around 10 times earnings,” he said.