Amazon has closed its $3.9 billion acquisition of primary care company One Medical, the tech giant said Wednesday.
The announcement comes after multiple news outlets reported late Tuesday that the Federal Trade Commission declined to block the deal between the two companies after a review that began in September. The deal was announced in July.
However, the FTC said Wednesday it will continue to look at the combination.
“The FTC’s investigation of Amazon’s acquisition of One Medical continues,” spokesperson Douglas Farrar said. “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.”
An FTC source with knowledge of the investigation said the agency would focus on how Amazon handles the medical records it purchased as part of the deal. The source said Amazon has received a pre-consummation warning letter, which alerts parties the transaction remains under investigation.
However, experts say this letter has no legal significance. Dale Collins, an adjunct professor of law at Georgetown University, said the agency didn't have a case against Amazon for the One Medical addition because it’s an ancillary business, similar to the tech firm's acquisition of grocer Whole Foods.
“The conventional wisdom is a fair number of companies have received these letters, but as far as I’m aware there has been no further no legal actions brought against any of these companies,” Collins said.
One Medical offers virtual and brick-and-mortar primary care services to commercially insured patients. Amazon is offering memberships to One Medical for $144 per year in the first year and $199 per year afterwards. It will be separate from Amazon Prime membership, the company said in a release.
Primary care has been a hot area for merger and acquisition activity. On Feb. 8, CVS Health announced a deal to acquire primary care provider Oak Street Health for $10.6 billion. VillageMD, a unit of Walgreens Boots Alliance, acquired primary care provider Summit Health-CityMD for $8.9 billion in November.
Bringing on One Medical is one piece of the moves Amazon has made in healthcare. In January, the company launched a generic drug subscription service aimed at consumers with common conditions like high blood pressure, acid reflux or anxiety. Amazon also has its online pharmacy that was launched in 2020 and grew out of the company’s acquisition of PillPack. In November, it created Amazon Clinic, which serves as a “virtual health storefront” offering users access to third-party, direct-to-consumer telehealth providers.
Amazon has had a few high-profile misses in healthcare as well. One month after the July acquisition of One Medical, Amazon announced it was shutting down its Amazon Care service at the end of 2022. Its joint healthcare-specific venture with J.P. Morgan Chase and Berkshire Hathaway disbanded in 2021.
One Medical's CEO Amir Dan Rubin plans to stay on after the transaction. Amazon, which did not make any executives available for an interview, did not specify Rubin's role going forward.