Column: Bezos bets $1 billion on the future of healthcare as Trump tells the same old lies

Amazon CEO Jeff Bezos moved his company into healthcare by purchasing an online pharmacy last week, while President Trump promised coverage “better than anything you’ve ever seen before.”
(AFP/Getty Images)

Two men stood out when it came to healthcare last week. One put a billion dollars on the line as part of a bold vision for the future of treatment and medicine.

The other told the same old lies.

The former was Amazon’s Jeff Bezos, who shelled out big bucks for the online pharmacy PillPack. This ended the guessing game about Amazon’s healthcare ambitions and sent a clear message to the medical marketplace that the company is a player.

Geoffrey Joyce, a USC pharmaceutical economist, called the move “the beginning of the end” for the current way drugs pass through multiple hands — and receive multiple markups — before reaching patients.


“Amazon can not only bring more efficiency to the distribution process but, more importantly, create something resembling a real functioning market, where prices are widely known and thus consumers and physicians can make better-informed choices,” he told me.

That latter standout, needless to say, was President Trump, who decided long ago that making stuff up is easier and more self-serving than sticking to facts.

“We are coming out with so many healthcare plans that are so much better than anything you’ve ever seen before — competitive,” he told a cheering crowd of supporters in North Dakota. “And Obamacare is essentially dead.”

Score that a hat trick of deception. The plans Trump referred to offer limited coverage that don’t meet the standards of the Affordable Care Act. This means they’re cheaper in cost but largely worthless to anyone with serious medical needs.

These plans are in no way better than anything you’ve seen before. They’re known as “junk insurance” and represent a genuine danger to the overall stability of the U.S. healthcare system.

That’s because younger, healthier people likely will be attracted by the plans’ lower premiums, leaving those covered by the Affordable Care Act’s more comprehensive policies exposed to far higher costs because the remaining risk pool has become older and sicker.


Offering less coverage for less money isn’t “competitive.” It’s short-sighted and reckless, undercutting the economic value achieved by providing the best possible insurance to the greatest number of people at the lowest possible price.

Is Obamacare essentially dead? Far from it.

Trump has done his best to cripple the insurance system for people who don’t receive coverage from an employer. Even so, nearly 12 million people — 12 million — signed up for Obamacare plans this year, which tells you how desperate many Americans are for decent health insurance.

Where Trump resorted to fabrications about how he’s improving healthcare, Bezos kept it real with Amazon’s PillPack acquisition, which is expected to close in the second half of the year.

New Hampshire-based PillPack specializes in presorting meds for people with chronic conditions who have to take multiple pills daily. It offers convenience and all the modern efficiencies of a high-tech operation, which makes it a good fit for Amazon’s data-driven portfolio.

More importantly, PillPack is licensed to ship prescriptions to every state except Hawaii and has existing relationships with drug companies, prescription-benefit managers, private insurers and Medicare.

It thus allows Amazon to hit the ground running and to build on PillPack for future growth in the pharmacy space — just as the company’s original online bookstore evolved into an online everything store.


At the moment, Amazon is playing its cards close to the vest.

“PillPack’s visionary team has a combination of deep pharmacy experience and a focus on technology,” said Jeff Wilke, Amazon’s head of retail operations.

“PillPack is meaningfully improving its customers’ lives, and we want to help them continue making it easy for people to save time, simplify their lives and feel healthier,” he said. “We’re excited to see what we can do together on behalf of customers over time.”

T.J. Parker, PillPack’s chief executive, was more suggestive about broader horizons. “Together with Amazon,” he said, “we are eager to continue working with partners across the healthcare industry to help people throughout the U.S. who can benefit from a better pharmacy experience.”

It’s not hard to see how this toast is buttered, which is why the stocks of most major drugstore chains plunged on news of the buyout.

After Bezos and Amazon find their footing, it’s inevitable they’ll offer lower drug prices based on an entirely new economic model, one that isn’t predicated on complex supply chains and the pursuit of ever-larger profits.

Richard Frank, a health economist at Harvard Medical School, indicated there’s plenty of room for improvement. “The supply chain is a mess,” he said.


Where Amazon goes from there is anyone’s guess. Once it nails down online sales of prescription drugs, it seems a safe bet that medical devices will be next. And don’t be surprised if Amazon’s Alexa plays a role in making sure people take their pills and encouraging a healthier lifestyle

In January, Amazon joined forces with Warren Buffett’s Berkshire Hathaway and JPMorgan Chase for a sweeping (but ambiguously defined) initiative aimed at reinventing how healthcare is delivered in this country. The companies said whatever they came up with would be “free from profit-making incentives and constraints.”

Doctor and journalist Atul Gawande recently was tapped to run the venture. He starts next week.

There’s every reason to be skeptical, of course. Until we know what these captains of industry are cooking up, all we can do is speculate.

But I’m relieved that powerful people are committed to finding smart solutions to tough problems.

It’s refreshing as well to hear them speak the truth, such as when Buffett observed that “the ballooning costs of healthcare act as a hungry tapeworm on the American economy.”


Or when Bezos acknowledged that changing the U.S. healthcare system will be extraordinarily difficult, but “reducing healthcare’s burden on the economy while improving outcomes for employees and their families would be worth the effort.”

Trump, meanwhile, sees nothing but sunshine on the horizon.

His skimpy insurance plans, he said last year, mean that “people will have great, great healthcare. And when I say people, I mean by the millions and millions,” he said.

“You’ll get such low prices for such great care.”

Not true. Not that he cares.

David Lazarus’ column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to