Amazon Investing in Healthcare Stocks
Amazon has recently become more interested in investing in healthcare stocks. Though it may seem as only a thought that Amazon is having, David Larsen, an analyst for a brokerage firm, believes that Amazon will enter the investment market at some point soon. Paul Mampilly, a successful investor who has spent decades analyzing the financial market, believes in David Larsen’s claim and believes that Amazon’s entrance to the healthcare market can have a strong impact on investors. The impact that Paul Mampilly believes that Amazon will have, should they decide to invest in healthcare stocks, is negative. About Paul Mampilly has studied the stocks that Amazon has invested in and realized that each of the companies has experienced a downward trend in their stock prices once they have been purchased by Amazon.
Both Paul Mampilly and Linda Cahn, a pharmacy consultant and a financial analyst, shared the view that Amazon becomes disruptive to a company as soon as they begin to approach the company with creative ideas. Amazon’s sights on the prescription drug market can change the purchase process that drugs undergo. There are several companies that are involved in the pharmaceutical process that receive large profits off of prescription drug sales. Profits for these middle companies is expected to increase over the coming years however Amazon’s entry into the market can produce negative changes on the expected profits.
Stock Price Decrease
With Amazon’s expected entry into the pharmaceutical market stock prices for many retailers has already begun to decrease. It is expected that the stock price will continue to decrease as time passes. Paul Mampilly says that purchasing these stocks as they continue to decrease will cause investors to lose money in the process. However, Amazon’s entry will have positive effects for the consumers of prescription drugs as the prices of medications will begin to decrease in price as well. With decreasing stock prices and decreasing medication prices according to Paul that profit margins for prescription drug retailers will decrease as well. Retailers such as Express Scripts, Walgreens, and CVS have begun to experience the effects of Amazon’s perceived entry into the prescription drug market.