Johnson & Johnson chief figures Amazon could shake up pharma's distribution, rebates and more

There’s been plenty of speculation about Amazon's intentions in pharmaceuticals, and now Johnson & Johnson’s CEO has weighed in on how the tech giant could affect drug markets by shaking up pharma distribution and reimbursement. Speaking with Fortune’s Susie Gharib, J&J CEO Alex Gorsky said megamergers in healthcare, such as the Aetna/CVS megamerger and Cigna’s Express Scripts buyout, demonstrate that “there is a lot of pressure in the system right now.” And as J&J knows firsthand from its consumer products business with Amazon, the retail giant's vaunted distribution efficiencies and broad consumer reach could help ease some of that pressure.
“We have conversations at all levels going on with Amazon. I think Jeff (Bezos) and as importantly Amazon is a very innovative organization, and they see this as an opportunity to make a difference," Gorsky said. "Just as we are partnering with them today in areas of our consumer products, we’ll look forward to partnering with them in the future in some of these other areas as well.”
It’s clear what Amazon could offer in distribution expertise, but the company could also explore changes in reimbursement, where drugmakers have complained about growing rebates for years. "We all know there are inefficiencies in the current system,” he said during the interview. “So whether it’s distribution, whether it’s reimbursement, whether it’s the way that we insure, all of those are significant opportunities. At J&J, we would welcome that kind of entrants into the market.”