Jeff Bezos, Amazon’s founder and CEO, said that reducing healthcare’s burden on the economy while improving outcomes for employees and their families would be worth the effort, and the 3 companies had the talented experts with fresh approaches and a long-term orientation that will be key to success.
Amazon, Berkshire Hathaway, and JPMorgan Chase announced that they will partner to form an independent healthcare company to serve their US employees, with the goal to improve US employee satisfaction while reducing overall costs, according to a press release.
The 3 companies said they will pursue this objective through an independent company that is “free from profit-making incentives and constraints.” The new entity will initially focus on technology to provide simplified, high-quality healthcare for their employees and their families, at a reasonable cost.” By bringing together 3 of the world’s leading organizations into this new construct, the group hopes to draw on its combined capabilities and resources to take a fresh approach to the critical healthcare challenges society faces today. Amazon is the world’s largest online retailer; Berkshire Hathaway is a holding company led by the billionaire investor Warren Buffett; and JPMorgan Chase is the largest bank in the United States.
Buffett compared the ballooning costs of healthcare to a “hungry tapeworm” feeding on the American economy. The companies say they are not approaching the problem with ready answers, but they are also not accepting the situation as inevitable. “We share the belief that putting our collective resources behind the country’s best talent can, in time, check the rise in health costs while concurrently enhancing patient satisfaction and outcomes,” said Buffett.
Jeff Bezos, Amazon’s founder and CEO, said that reducing healthcare’s burden on the economy while improving outcomes for employees and their families would be worth the effort, and the 3 companies had the talented experts with fresh approaches and a long-term orientation that will be key to success.
Chairman and CEO of JPMorgan Chase, Jamie Dimon, noted that the 3 companies have extraordinary resources and can potentially help all Americans. “Our people want transparency, knowledge, and control when it comes to managing their healthcare,” he added.
The three partners will focus on their collective 1.1 million employees first before opening to the general market. There are few details available about the new company, but the names of the 3 executives who will be leading the effort at the start were released: Marvelle Sullivan Berchtold, a managing director of JPMorgan Chase; Todd Combs, an investment officer of Berkshire Hathaway; and Beth Galetti, a senior vice president at Amazon.
Analysts said the new entity would face challenges such as assessing risk and other tasks that competing insurers are skilled at, but would be able to hire talent to provide for those needs. According to analyst Andrea Harris of Height Securities, the planned venture into healthcare announced by the 3 companies will target drug makers, wholesalers, pharmacy benefit managers (PBMs), and specialty pharmacies, because that is where scale and efficiencies can have the biggest impact. They are less likely to target managed care firms, where markets are too thin and setting up a care network is expensive and difficult.
Harris noted that if Amazon acquires Express Scripts—the last remaining large-market capitalization PBM—it would be in a strong position to drive down prices.
Mark Merritt, president and CEO of the Pharmaceutical Care Management Association, a trade organization representing American PBMs, is taking a wait-and-see approach. “If they have great ideas, we’d be glad to hear them,” he said. But he cautioned against companies involving themselves in complicated businesses that are not part of their core competency. “I think healthcare solutions are better solved on the back end rather than talking about what people’s aspirations are.”
Wall Street’s reaction to the announcement was a slide in the shares of CVS, UnitedHealth, Aetna, Anthem, and Express Scripts.
HHS Praises Biosimilars Savings but Opportunities to Reduce Part B Spending Remain
November 28th 2023Although biosimilars have already generated savings for Medicare Part B programs and beneficiaries, opportunities for substantial reductions in spending remain, according to a report from the HHS.
Biosimilar Business Roundup for October 2023—Podcast Edition
November 5th 2023On this episode, we discuss the biggest news to come out of October 2023, including 3 regulatory approvals, 2 complete response letters, and new data and industry insights that have the potential to impact the entire US biosimilar industry.
Eye on Pharma: Adalimumab Updates; New Eylea Biosimilar Lawsuit; Canada Gains Stelara Biosimilar
November 22nd 2023Several companies make moves to further their adalimumab biosimilars, Regeneron sues Celltrion over biosimilar for Eylea (aflibercept), and Health Canada grants marketing authorization for biosimilar referencing Stelara (ustekinumab).
Biosimilars Business Roundup For August 2023—Podcast Edition
September 5th 2023On this episode, we’re giving an overview of some of the biggest stories in the business space regarding biosimilars, like the approval of the first neurology biosimilar, growth projections from company quarterly expense reports, and some analyses about the health of the market.
AMCP Nexus: Panelists Share Current Scope of Biosimilar Industry
October 26th 2023Panelists at the Academy of Managed Care Pharmacy (AMCP) Nexus meeting chronicled the current state of the US biosimilar market, including current policies impacting the market, recent regulatory decisions, and the developing arguments around requirements for clinical efficacy studies.
Report: Conflicting Guidelines, Rebate Walls Are Major Factors Determining Biosimilar Uptake
October 24th 2023Samsung Bioepis’ most recent biosimilar market report identified inconsistent medical guidelines, challenges with access and rebates, and acute vs chronic treatment duration as major factors influencing biosimilar uptake in the United States.