Amazon in 'exploratory talks' with Mylan, Novartis, other generic drugmakers

Amazon has reportedly held preliminary discussions with several generic drug manufacturers regarding the company's potential foray into the pharmacy business, sources familiar with the matter told CNBC.

The sources, who sought to remain anonymous because the discussions have not been made public, claim the retail giant has held conversations with Mylan and Sandoz, a unit of Novartis.

Leerink, a healthcare investment bank, confirmed in a note to its investors Thursday Peter Goldschmidt, president of Sandoz U.S. and head of the company's North America division, "met and discussed with Amazon its plans for getting into the U.S. healthcare market" during a recent biopharmaceutical event, according to CNBC.

It is unclear how Amazon plans to enter the pharmacy business, though the company recently announced specific plans to use its pharmacy licenses in Tennessee and Indiana to sell medical devices and supplies instead of prescriptions.

One source told CNBC Amazon's conversations with drugmakers involve the company's potential role in drug purchasing, a move that would disrupt the space currently dominated by companies such as McKesson, AmerisourceBergen and Cardinal Health, the report states.

However, some companies are skeptical of Amazon's entrance into the market. Deerfield, Ill.-based Walgreens Boots Alliance Executive Vice Chairman and CEO Stefano Pessina said during the last day of Forbes Healthcare Summit Thursday Amazon "will not come in an industry so complicated as our industry," according to Business Insider.

While Express Scripts President and CEO Tim Wentworth told CNBC Thursday he won't talk about whether the company has engaged in discussions with Amazon, he said the retail giant will have to do more than lower drug prices in order to stay competitive in the industry.

"What [Amazon] will see is the magic isn't in lower net prices to consumers. It's getting the right drug to consumers and helping them navigate the system — all things we've built a business over 30 years to do," Mr. Wentworth said.

Representatives from Sandoz also told CNBC it does not expect Amazon to have a "major impact" on its business.

Amazon, Mylan and Novartis did not return CNBC's requests for comment.

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