A sign is posted in front of a One Medical office on July 21, 2022 in San Rafael, California.
Justin Sullivan | Getty Images
Amazon on Wednesday said it had closed its $3.9 billion deal for primary care provider One Medical.
Amazon agreed last July to acquire One Medical to deepen its presence in health care, and “dramatically improve” the experience of getting medical care. Amazon has long had ambitions to expand into health care, buying online pharmacy PillPack in 2018 for $750 million, then launching its own virtual clinic for chronic conditions, and prescription perks for Prime members.
The deal gives Amazon access to One Medical’s more than 200 brick-and-mortar medical offices in 26 markets, and roughly 815,000 members.
The purchase was the first major deal announced since CEO Andy Jassy took the helm from founder Jeff Bezos in July 2021, and Jassy has indicated he sees health care as a major area of expansion. In a statement, he said health care is ripe for disruption, citing long appointment times and the complexities of primary care.
“Customers want and deserve better, and that’s what One Medical has been working and innovating on for more than a decade,” Jassy said in a statement. “Together, we believe we can make the health care experience easier, faster, more personal, and more convenient for everyone.”
Amazon said it would discount One Medical memberships for U.S. users to $144 from $199 for the first year, regardless of whether they’re a Prime subscriber.
The closing comes after a deadline passed for the Federal Trade Commission to challenge the deal. The acquisition had been undergoing an in-depth review at the FTC for the past several months. Last September, the agency sent Amazon and One Medical a so-called second request for more information about the deal, according to securities filings.
While Amazon waited out the required period to close the deal, the FTC could still decide to bring a case to unwind the merger at a later point — a right it reserves in any deal it reviews. The FTC under Chair Lina Khan has sent out letters to some parties seeking to merge saying that while they can’t hold up the merger any longer because the deadline has passed, they are still investigating and could take legal action at a later date. Still, breaking up a merger is often more difficult in a practical sense once two businesses are formally combined.
“The FTC’s investigation of Amazon’s acquisition of One Medical continues,” said FTC spokesman Douglas Farrar. “The commission will continue to look at possible harms to competition created by this merger as well as possible harms to consumers that may result from Amazon’s control and use of sensitive consumer health information held by One Medical.”
The FTC sent a letter to the companies warning them that the parties are closing the deal at their own risk, and that it still has specific concerns about the deal, an agency official confirmed.
Amazon’s $8.5 billion deal for movie studio MGM also cleared regulatory hurdles last March. The company still faces an ongoing probe by the FTC into its Prime program, as well as its online marketplace. The agency is also reviewing Amazon’s $1.65 billion purchase of iRobot, which it announced last year.
Khan is one of Amazon’s biggest critics. She made her first big splash in antitrust circles with her 2017 Yale Law Journal article, “Amazon’s Antitrust Paradox.” The article, which she wrote while still a law student, argued that the popular antitrust framework focused on consumer welfare, was inadequate to assess digital giants like Amazon.
