Amazon expands health care footprint with $3.9B acquisition of One Medical

Amazon solidified its growing position in health care on Thursday by announcing a definitive merger agreement to will acquire One Medical, a primary care organization based in San Francisco.

Amazon will acquire One Medical for $18 per share in an all-cash transaction valued at approximately $3.9 billion, including One Medical’s net debt. Completion of the transaction is subject to customary closing conditions, including approval by One Medical’s shareholders and regulatory approval.

“We love inventing to make what should be easy easier, and we want to be one of the companies that helps dramatically improve the health care experience over the next several years,” says Neil Lindsay, senior vice president of Amazon Health Services. “Together with One Medical’s human-centered and technology-powered approach to health care, we believe we can and will help more people get better care, when and how they need it. We look forward to delivering on that long-term mission.”

On completion, Amir Dan Rubin will remain as CEO of One Medical.

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“There is an immense opportunity to make the health care experience more accessible, affordable and even enjoyable for patients, providers and payers,” he says. “We look forward to innovating and expanding access to quality health-care services together.”

The acquisition is the latest development in Amazon’s health care strategy. In 2018, it purchased the online pharmacy startup PillPack, which had mail-order pharmacy licenses in all 50 states. Amazon rebranded the company as Amazon Pharmacy to offer prescription drug delivery to consumer homes, including Prime two-day delivery to members.

In early 2021, Amazon officially established Amazon Care, a virtual primary and urgent care system for its employees and their families. It has differentiated itself from other telehealth services by providing speedier options and better access. The convenience of medical care within a minute, a 24/7 care team and in-home care became increasingly important to members during the COVID-19 pandemic.

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“Amazon’s strategy is not a pharmacy strategy but rather a health care strategy as it continues to blend the medical and pharmacy benefits,” Susan Lang  CEO and founder of XIL Health, wrote in BenefitsPRO earlier this year. “High-deductible health insurance plans that blend the benefits together in the United States have paved the way for a structural shift that fuels companies like Amazon to enter the market.

“While Amazon might not have been the first tech disruptor to really enter the space and favor cash (Walmart claims that title), Amazon has found ways to combine health care and pharmacy and scale it into its already existing retail infrastructure.”