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Drug suppliers' shares rise as looming Amazon threat appears to ease


By Manas Mishra

(Reuters) - Shares of U.S. rose on Monday after a report that com Inc had dropped plans to sell drugs to hospitals, in a boost to a rattled by the looming threat of competition from the

Stocks of drug distributors , and Cardinal Health rose 2 to 3 percent, while drugstore chains Alliance and each advanced about 5 percent.

expect will become a major force in the industry, fuelled by that the Seattle-based company was considering entering the pharmacy business.

CNBC, which reported Amazon's plans on Monday, said the change comes partly because the company had not been able to convince big hospitals to change their traditional purchasing process.

The company, through its Business unit, will instead focus on selling less sensitive medical supplies to hospitals and smaller clinics, CNBC said, citing people familiar with the matter.

Amazon told it does not comment on rumours or speculation.

"After months of hype and fear it appears now that Amazon's entry into the drug distribution space has been indefinitely delayed," said Amazon is likely to remain focused on selling dental and medical products, he added.

The presence of established drug suppliers, along with difficulties in distributing highly regulated treatments, likely deterred the from entering the industry, analysts said.

"Even with Amazon's large war-chest, it is still a difficult prospect given the dynamics of the whole pharmaceutical market," Morningstar said.

In January, Amazon, and unveiled plans to form a company to cut for hundreds of thousands of employees.

(Reporting by in Bengaluru; Editing by Sai Sachin Ravikumar)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, April 17 2018. 01:30 IST