Amazon’s Acquisition of One Medical May Be Tough Pill to Swallow

In its latest foray into healthcare, Amazon announced that it will acquire primary care organization One Medical for $3.9 billion. The all-cash deal demonstrates Amazon’s continued appetite for applying its technology, talent, and financial resources to transform new industries. 

One Medical is a primary care practice where 767,000 patients subscribe to its services. It has nearly 200 locations across the country and provides virtual services. After its 2018 purchase of online pharmacy Pill Pack and 2020 launch of Amazon Pharmacy in 2020, Amazon is doubling down on its bet that it can revolutionize healthcare. 

As Amazon put it in their joint press release, “[t]he opportunity to transform health care and improve outcomes by combining One Medical’s human-centered and technology-powered model and exceptional team with Amazon’s customer obsession, history of invention, and willingness to invest in the long-term is so exciting.”

One Medical represents a new area of the industry for Amazon, and is reminiscent of the tech giant’s 2017 acquisition of Whole Foods. In both instances, Amazon began in the digital space before acquiring a physical presence. But while Amazon has been able to tackle the grocery business, analysts point out that healthcare is a more complicated – and dysfunctional – beast.

Net Sales of Whole Foods 2010-2021 


The deal still requires regulatory approval, which is far from a certainty. Some have lambasted the acquisition as an assault on privacy, describing Amazon’s expansion into Americans’  lives: “First, Amazon learned what I read. Then Amazon learned what I put in my home. It tracked what I covet as gifts. It started watching what I watch on TV. Next, Amazon bought my grocery to learn what I eat. Now Amazon wants to own my doctor’s office, too,” wrote Geoffrey A. Fowler, a tech columnist with The Washington Post.

Likewise, politicians have taken note. Sen. Joshua Hawley (R-Mo.) swiftly urged the Federal Trade Commission to investigate the acquisition. The Biden Administration has vowed to pursue a more aggressive antitrust policy . Senator Hawley, who has sought to battle big technology firms, is attempting to focus the FTC’s energies on Amazon. He warns of the privacy dangers as well as seizing upon customers’ medical data to push sales of medications. “For instance, if an individual is diagnosed with high blood pressure by a One Medical doctor, will he later be advertised over-the-counter blood pressure medications whenever he shops at Whole Foods Market?,” asked Sen. Hawley, “Promoting wellness is one thing; dystopian corporate ‘nudging’ is quite another.”

According to Matterhorn’s M&A database, which harnesses both AI and attorneys to digest the granular deal points of publicly announced transactions, Amazon was advised by law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP. One Medical was advised by law firm Cooley LLP, and financial advisor Morgan Stanley & Co. LLC.