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Amazon finds the healthcare space a hard nut to crack

Rumors surrounding Amazon’s (AMZN) foray into the trillion-dollar healthcare market had not only grabbed widespread media attention; it had also encouraged competitors to join forces to continue to stay in business. But the e-commerce major has now cancelled its plans to sell drugs to hospitals.

Shares of several US drugstore chains including Walgreens (WBA) and CVS Health (CVS) saw an upward trend during Monday’s trading session after a report from CNBC stated that Amazon is stepping back from pharmaceutical sales through its Amazon Business.

Amazon apparently found the healthcare space quite challenging and was unable to replace the traditional purchasing processes, as major hospitals were reluctant to set aside their trusted partnerships with the existing dealers.

Apart from this, Amazon is facing an ire from the President, Donald Trump, himself, for allegedly hurting the postal services in the country.  Amazon’s withdrawal from the pharmaceutical space could also be seen as a move to pacify Trump’s approach towards the company.

The Amazon Business unit is mostly focused on selling less-sensitive medical supplies like gloves and stethoscopes to hospitals and smaller clinics. And for a year now, it has been working on including pharmaceuticals as well. It was speculated that Amazon customers could order their medication via Alexa, the virtual assistant developed by Amazon.

Amazon apparently found the healthcare space quite challenging and was unable to replace the traditional purchasing processes, as major hospitals were reluctant to set aside their trusted partnerships with the existing dealers.

Despite these setbacks, CEO Jeff Bezos is making some bold moves into the healthcare space by offering a discount on its Prime membership program to the recipients of Medicaid — the public health insurance program initiated for low-income Americans.

Recently, Amazon also entered into a joint venture with JPMorgan (JPM) and Berkshire Hathaway (BRK) to improve healthcare for their US employees at a lower cost.

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