The “Amazon” Impact

Rarely does a day go by without news coming out about how Amazon is going to change the world. Mega deals are being done to offset what we like to call the Amazon Impact. It’s become somewhat of a parlor game trying to predict which industry Amazon will target next and what they’ll do once they get there. Even our cash rich friends in the Valley are paying very close attention to the moves being made and considered by their friends in Seattle. The fact is Amazon is the 800-pound gorilla that is feared by everyone who does not work with or for them.

It’s public knowledge that in our wacky world Amazon is working with Merck to turn Alexa into a diabetes coach. It’s also well known that this is just the first of many possible roads Amazon can travel down. Rather than speculate on what Amazon may and may not do lets instead talk about what they won’t do and then speculate after that.

One area we don’t believe Amazon will pursue is becoming a manufacturer of any diabetes device. We do not see Amazon making insulin pumps or continuous glucose monitoring systems or even conventional glucose meters. Nor do we see the company selling their own biosimilar insulin. Simply put we do not see Amazon entering any area which is regulated by the FDA.

There are a host of things the company can do, and we think will do. From our vantage point when it comes to the wacky world of diabetes Amazon is nothing more than the best damn logistical company on the planet. Therefore, we can envision Amazon doing what they do best which is getting supplies in the hands of patients. Doing so quickly, easily and painlessly. Effectually Amazon could become the fulfillment arm for companies like Dexcom (NASDAQ: DXCM) and Tandem (NASDAQ: TNDM).

Now we realize that not every Dexcom or Tandem patient is an Amazon member, but our guess is that the majority are and those who aren’t can be enticed into joining Amazon. We also realize that as of, yet Amazon is not a pharmacy but if all the reports are correct its just a matter of time before this is another industry they enter. The fact is in the future Amazon will be able to deliver everything a patient with diabetes needs to manage their diabetes, the drugs they use and the supplies they use.

Once Alexa evolves into a diabetes coach/manager she can make the patients life simpler and easier. Let’s stay away from coaching aspect for just a moment and instead concentrate on the fulfilment role Alexa can play. With every diabetes device becoming cloud enabled it’s not a huge leap until all these devices communicate not just with an app but Alexa. Therefore, Alexa can automatically ship the patient supplies and drugs as needed, the patient won’t have to do anything more than confirm these supplies or prescription refills are needed.

The coach/manager role played by Alexa is not a major leap but is slightly more problematic. Not because it cannot be easily accomplished no the problem comes back to what we have said all along going beyond providing the how to manage diabetes to the action of managing diabetes. With their vast resources and reach Amazon can buy what they need or find several willing partners who would happily jump at the chance to partner with them.

From our perspective the Amazon Impact in diabetes will not come from better patient outcomes although that would be a nice side benefit. The impact we see is making the patients life easier in terms of the delivery of the supplies and drugs they use. Once this becomes the domain of Alexa its one less thing the patient must worry about and let’s be honest the fewer things a patient must worry about the better.