Amazon Health Foray Reawakens Demons for Telemedicine Stocks
(Bloomberg) -- Telehealth stocks and managed-care companies felt the burn yet again after a report that Amazon.com Inc. plans to bring its health offerings to other companies.
The tech giant is looking to offer primary care for large employers through a mobile app that provides both in-person and online doctor visits in what would be an extension of its Amazon Care business, according to Business Insider. While the product remains in a pilot mode and only serves Amazon’s own employees, the report sent shares of competitors like Teladoc Health Inc. and Molina Healthcare Inc. lower Wednesday.
Managed care providers and companies that specialize in telemedicine were among the industry’s worst performers. Telehealth provider Teladoc sank 6%, the most since Nov. 9, while peer American Well Corp. dropped as much as 10%. Large health insurers like UnitedHealth Group Inc., Cigna Inc., and Humana Inc., and Molina Healthcare Inc. each fell 1% or more.
The weakness spread to U.S. pharmacy chains including CVS Health Corp. and Rite Aid Corp. as investors positioned for what Amazon’s next steps could mean. GoodRx Holdings Inc., which tumbled last month amid fresh criticism from Amazon’s potential impact, fell 4.6%.
Reports that Amazon will pitch its telehealth business to other large companies “could further pressure the competitive landscape of the telehealth industry,” Stephens analyst Scott Schoenhaus wrote in a note. “We are becoming increasingly worried about competition in the space,” and further lowered estimates as a result, he said.
©2020 Bloomberg L.P.