Feds investigate Amazon for antitrust violations
The FTC has allegedly brought in outside economists to review Amazon’s acquisition of One Medical for $3.9 billion, in preparation for an antitrust lawsuit against the company, Wall Street Journal reports.
Amazon announced plans to acquire One Medical in July 2022, which immediately drew backlash from critics concerned about Amazon’s growing monopoly in healthcare.
Related story: What is Amazon’s $3.9B purchase of One Medical really going to change about healthcare?
San Francisco-based One Medical is a boutique medical-tech organization that provides virtual and in-person healthcare services in 182 offices nation-wide.
Through the Health Care Market Oversight (HCMO) program, the Oregon Health Authority (OHA) approved the deal after a 30-day review.
HCMO reviews business deals in healthcare, “to make sure they support statewide goals related to cost, equity, access, and quality.”
Though the report found “potential equity concerns” surrounding the possibility of One Medical “siphoning off commercially insured patients with higher payment rates from clinics that serve more Medicaid and Medicare-covered patients,” it approved the deal on December 23, 2022.
“Acquiring One Medical will entrench Amazon’s growing presence in the health care industry, undermining competition,” said Krista Brown, Senior Policy Analyst at the American Economics Liberties Project in a statement.
Market power isn’t the only concern at hand. Many tech companies are not prepared to meet the data protection standards required in the healthcare industry.
“It [the acquisition] will also pose serious risks to patients whose sensitive data will be captured by a firm whose own Chief Information Security Office once described as a ‘free for all,’” Brown continues.
Since its beginning as an online book seller, Amazon has expanded into the most widely-used online retailer, online marketing platform, delivery network, book publisher, movie and television producer, and more. Amazon’s business strategy has been to forego immediate profits in exchange for immense market power.
Last month, Amazon launched a prescription subscription service that promises unlimited prescription for $5 a month. The service has the potential to serve low-income and underinsured individuals to access cheap generics.
Related story: Breaking barriers: how Amazon Pharmacy RxPass is improving health equity
Amazon’s expanding pharmacy endeavor is expected to have a similar effect on brick-and-mortar pharmacies as it did independent booksellers. After Amazon began in 1995, Independent booksellers dropped by 43%, according to the American Booksellers Association (ABA).
Like with book prices, it could easily raise healthcare and pharmacy prices once it gains control of the market through methods that are potentially completely legal at this time.
The investigation is spearheaded by FTC Chair Lina Khan, whose paper in the Yale Law Journal outlines the complicated modern legal issues that Amazon represents.
Khan argues that the current antitrust laws are “unequipped to capture the architecture of market power in the modern economy.”
“We cannot cognize the potential harms to competition posed by Amazon’s dominance if we measure competition primarily through price and output,” she continues.
Highlights of Amazon’s progression into healthcare
- 2018: Amazon creates 1492, a tech development lab that is thought to be creating a platform for patient health records and data. In the same year, Amazon acquired PillPack, and online retail pharmacy, and launched Haven aimed at improving healthcare costs for employees which closed in 2021.
- 2020: Amazon started its own COVID-19 testing labs.
- 2021: Amazon Care begins delivering virtual and in-person primary care service.
- 2022: Teamed up with Telahealth Doc to build a voice-activated virtual care program
By the end of 2022, Amazon closed its own clinics and acquired One Medical.
- 2023: Amazon launches AmazonRx, a subscription bundle program.
The FTC might have plenty of antitrust cases on their hands in the near future as more tech companies stake their claim in healthcare.
Currently, Google owns a highly profitable subsidiary: Granular. Granular is a part of Verily, a health research institution, and sells “stop-loss” insurance to employers who want to protect themselves against their employees’ potentially costly medical bills.
The company’s revenue has grown “nearly sixfold” through only the first nine months of last year, The Verge reports. While the cause of growth is not clear – it could be because of it’s access to immense data.
Related story: FTC fines GoodRx $1.5 million for allegedly selling users’ health information