Health-care stocks from Express Scripts Holding Co. to CVS Health Corp. were roiled by news that Amazon.com Inc., Berkshire Hathaway Inc. and JPMorgan Chase & Co. were entering the space to aid their workers and cut costs. The “Amazon boogie-man” hit pharmacy benefit managers and insurers the hardest as the news spoiled investor sentiment. However, the group’s decision is “more bark than bite at this point,” Cantor Fitzgerald analyst Steven Halper wrote in a note.
Piper Jaffray health services analyst, Sarah James
—Views the partnership as "noise," adding that today’s selloff is a buying opportunity for "high quality leaders" such as UNH and ANTM.
—"Many have tried, but few have succeeded," she wrote. "We do not expect this JV to be a meaningful disruptor to the industry, despite the stock reaction indicating that it is."
—Says insurance is a complex industry with high barriers to entry and nuanced expertise required, noting that Berkshire has a history as a long-time Aetna supporter.
—Says health-care IT already offers some solutions for bending the U.S. cost curve, adding that it would be difficult for a purely technology-based company to compete against the size and cost-savings capabilities from the likes of UNH.
Cantor Fitzgerald health services analyst, Steven Halper
—“Too early to cede victory,” but does not want to discount the clout the companies bring to the table.
—Sees group’s effort as “more bark than bite at this point.”
—Partnership fully supports thesis that employers, providers and health plans will have to embrace consumer engagement technology.
RBC Capital Markets health services analyst, George Hill
—“If this was the Amazon announcement drug supply chain investors have been fearing since early 2017, consider us relieved.”
—Notes the group is not the first to “work together to rein in healthcare costs.”