FTC Probes Amazon's Purchase of Virtual, In-Person Care Provider One Medical

The Federal Trade Commission (FTC) has requested additional information and documentary materials from Amazon and One Medical as it reviews the planned merger between the two companies, according to a new regulatory filing.

Per the Sept. 2 filing by 1Life Healthcare, Inc., One Medical's parent company, the FTC requested the additional materials as part of its regulatory review process, which aims to ensure that proposed mergers and acquisitions do not reduce competition, hike prices, lower quality of goods or services, or deter innovation. If a proposed deal is found to be anticompetitive, the FTC can take formal legal action to block it.

Amazon and One Medical expect to promptly respond to the FTC's request and "to continue to work cooperatively with the FTC in its review of the merger," the filing states. Neither company responded to a request for comment from mHealthIntelligence for this story.

In July, Amazon announced its plans to purchase One Medical for $3.9 billion. Once completed, the acquisition will give Amazon 188 in-person locations across the country and various virtual care options.

One Medical is membership-based, providing direct-to-consumer primary care through in-person care settings and a mobile app that can be used to schedule appointments, view health records, renew prescriptions, and connect with clinicians through messaging or video chat.

The proposed acquisition signals Amazon's growing grip on healthcare resources, but experts told mHealthIntelligence that the benefits of the tech giant's purported "reinvention" of the healthcare experience would only be felt by an urban, commercially insured consumer niche.

A little over one month after the One Medical acquisition was announced, Amazon appears to have shifted its weight squarely behind a hybrid virtual and in-person healthcare strategy. The company said it would close its Amazon Care telehealth business by the end of 2022.

"Although our enrolled members have loved many aspects of Amazon Care, it is not a complete enough offering for the large enterprise customers we have been targeting, and wasn't going to work long-term," Amazon Health Services Senior Vice President Neil Lindsay wrote in an internal memo shared with mHealthIntelligence.

According to Sanjula Jain, PhD, senior vice president and chief research officer at market research firm Trilliant Health, the move was likely driven by an enduring preference for in-person care amid dwindling telehealth use.  

"…Amazon's revised virtual care strategy will likely align with what the data shows: integrating virtual care within an in-person care delivery platform, which is what One Medical offers," Jain said in an email to mHealthIntelligence.

The news of the FTC probe into the planned acquisition comes on the heels of reports of another investigation by the agency into the Amazon Prime business. The FTC is investigating whether Amazon misleads users into signing up or canceling their Prime subscriptions, according to CNBC.  

Further, the probe is being conducted under the leadership of FTC Chairwoman Lina Khan, a noted critic of Amazon, the Wall Street Journal reported. Khan wrote a law review article in 2017 stating that "elements of [Amazon's] structure and conduct pose anticompetitive concern."

Last year, Amazon's attempt to prevent Khan from overseeing antitrust matters proved unsuccessful.