Amazon, Berkshire Hathaway, JPMorgan Chase Team On Health Care; CVS, UnitedHealth Dive
Amazon.com (AMZN), Warren Buffett’s Berkshire Hathaway (BRKB) and JPMorgan Chase (JPM) announced Tuesday morning that they are “partnering on ways to address healthcare for their U.S. employees, with the aim of improving employee satisfaction and reducing costs.”
X The corporate giants will create an “independent company that is free from profit-making incentives,” according to a statement announcing the alliance.
“Tackling the enormous challenges of healthcare and harnessing its full benefits are among the greatest issues facing society today. By bringing together three of the world’s leading organizations into this new and innovative construct, the group hopes to draw on its combined capabilities and resources to take a fresh approach to these critical matters.”
Health insurers and pharmacy benefits managers sold off concerns that corporate America could try to slash costs, reducing prices and demand for their services. CVS Health (CVS), a major PBM as well as a drug store giant tumbled 7.9%, while Express Scripts (ESRX) lost 4.7%. CVS Health is in the process of acquiring insurer Aetna (AET) in a transformative deal to compete with UnitedHealth (UNH) and amid speculation that Amazon could enter the prescription drug pharmacy business in some way. Aetna reported Q4 earnings Tuesday morning.
As for the Dow’s UnitedHealth, which has a PBM, retreated 7.6%.
The new joint venture will be led by Todd Combs, an investment officer of Berkshire Hathaway; Marvelle Sullivan Berchtold, a managing director of JPMorgan Chase; and Beth Galetti, an Amazon senior vice president.