Walmart and Amazon could be readying for war over a growing chunk of the US population

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  • Recent news on Walmart and Amazon suggests the two could be readying for war over the over-65 crowd. 
  • Walmart's looking at buying pharmacy startup Pillpack, according to CNBC, and is interested in new partnerships with Humana. Those two deals could change the way Walmart serves the elderly. 
  • The same crowd is clearly a focus for Amazon, also. Babak Parviz, a vice president at Amazon, said in February that the elderly was something "we deeply care about." 

The US population is aging. By 2050, the number of people over the age of 65 is expected to be double what it was in 2012.

An aging population means we'll see an increase in health concerns and chronic conditions like heart disease, neurodegenerative diseases, and cancer that can be costly to manage. It also offers a business opportunity for those companies best placed to meet the healthcare needs of this growing population.

Rivals Amazon and Walmart both seem to have the elderly on their radar, with reports of potential takeovers by Walmart that include a pharmacy startup and a health insurer focused on Medicare plans. Amazon's early moves in healthcare offer the promise of helping the company serve a community it has struggled to reach, meanwhile.

It appears the stage is being set for a battle between Walmart and Amazon for America's elderly. 

A wave of potential deals for Walmart

Humana has held early-stage talks with Walmart focused primarily on new partnerships, though an acquisition has been brought up, multiple news outlets reported last week. While you probably think of Walmart as a giant retail business, it's also one of the largest pharmacy chains in the US, behind only Walgreens and CVS.

And on Monday, CNBC reported that Walmart is looking to buy Pillpack, a pharmacy startup that mails prescriptions that are packaged together based on when they need to be taken. Pillpack declined to comment. Walmart didn't respond to requests for comment. 

Walmart may be known as a retail giant, but it's one of the biggest pharmacy chains in the US. It's also long had a focus on affordable prescriptions as well, offering some generic medications for $4.

Walmart's historically had an interest in the Medicare population. For example, Humana and Walmart have a cobranded Medicare drug plan and an initiative that provides healthy-food credits.

Should Walmart and Humana link up on more partnerships and a potential acquisition, Walmart would become more embedded with Humana's Medicare business, which is the health insurer's main focus.

Under a combined Walmart-Humana, adding on a service like Pillpack could make a lot of sense geared at an elderly population that tends to have more prescriptions and more chronic conditions.

Pillpack works with Part D and Medicare Advantage plans to provide prescriptions to members. This can be beneficial to the commercial health plans that can get better reimbursements from Medicare based on making sure members don't lapse in picking up their prescriptions.

Should the deals materialize, it could put Walmart in an interesting position when it comes to taking care of an aging population.

"This reported interest by Walmart is consistent with a focus on seniors, as PillPack's value proposition helps with seniors who have multiple prescriptions," and Humana is a leading Medicare Advantage managed care organization, Bernstein analyst Lance Wilkes wrote in a note Tuesday. 

Amazon's interest in the aging population

People over 55 aren't among the biggest users of Amazon Prime, which could be a case for Amazon getting into healthcare.

"We note too that the older demographic still under-indexes toward Prime membership...which speaks to the opportunity for Pharma to help Amazon further penetrate the ~80 million 55+ population in the United States," Morgan Stanley analysts wrote in a note in November speculating on Amazon's entry into healthcare.

Since then, Amazon's ambitions in healthcare have become clearer. The tech giant is teaming up with JPMorgan and Berkshire Hathaway on a nonprofit healthcare initiative, and it already sells over-the-counter medication, including an exclusive line called Basic Care.

While those moves don't necessarily spell out a focus on the aging population, Babak Parviz, a vice president at Amazon, said at Klick Health's Muse event in New York in February that the elderly was something "we deeply care about." 

"We have looked at the older population in the context of health obviously, but we know that this group has a lot of issues, a lot of unmet need, some of them relate to health, but their health and the broader issues that they face are all interrelated," Parviz said. 

SEE ALSO: Walmart's talks with an insurance giant could be part of an assault on Amazon Prime

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Contributer : Tech Insider https://ift.tt/2Gx3Ezu
Walmart and Amazon could be readying for war over a growing chunk of the US population Walmart and Amazon could be readying for war over a growing chunk of the US population Reviewed by mimisabreena on Wednesday, April 04, 2018 Rating: 5

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