Will Berkshire Hathaway, JPMorgan and Amazon Succeed in Disrupting the Healthcare Sector?


The latest rumour has it that Warren Buffet, Jeff Bezos and Jamie Dimon will team up to disrupt the healthcare sector. They say that healthcare prices and pharmaceutical prices are way too high, and that they share a common goal about helping fellow Americans. However, the main goal is to create an independent health care company for their employees in the United States.

Warren Buffet is the CEO of Berkshire Hathaway (NYSE: BRK.B) and as of 2/1/18 is said to have a real-time net worth of $92.4 billion. The investor, known by the name “the oracle of Omaha” is also known for being able to see opportunities well before others. Few people would argue that Buffet is most likely the best investor of all time. What’s special about Buffet is that he is able to create shareholder value over decades, and he has a profound understand of how a well-established business should operate and run.

As if having Buffett entering the healthcare sector wasn’t enough, Jeff Bezos, the CEO of Amazon (NYSE: AMZN) and Jamie Dimon, the CEO of JPMorgan (NYSE: JPM) will partner up with the oracle and together find a way to disrupt the healthcare sector. Bezos, who is said to be the richest man in the world as of late October 2017, with a wealth at $120.5 billion, will surely use his amazing entrepreneurial spirit and find a way to improve the sector.

Rumours have it that some hospitals are starting to manufacture their own medicine because buying it from the pharma company had gotten so expensive. So maybe it’s time for some change within the health care sector? What’s sure is that the current companies are highly afraid of this new partnership. On Tuesday, the share price of many healthcare stocks surged:

MetLife Inc. (NYSE:MET) down 9.2 %, CVS Health Corp (NYSE:CVS) down 5.39 %, Walgreens Boots Alliance (NYSE:WBA) down 4.31 %, Express Scripts (NYSE:ESRX) down 10.38 %, Cardinal Health Inc. (NYSE:CAH) down 3.76 %, UnitedHealth (NYSE:UNH) down 4.98 %, Anthem Inc. (NYSE:ANTM) down 5.40 %, Aetna Inc. (NYSE:AET) down 2.81 % and Humana Inc. (NYSE:HUM) down 2.76 %

Cleary, the sector is afraid of the entry of the new partnership. “The three of our companies have extraordinary resources, and our goal is to create solutions that benefit our U.S. employees, their families and, potentially, all Americans,” said Dimon.

The big joker his Trump and how what he will do with the pharmaceutical sector. Trump has stated that the U.S. pays more than any other countries for prescription drugs is “very very unfair”. It’s not highly unlikely that Trump will comment on the new partnership. For now, it seems like it might take some time before the idea moves from just a thought into something real, but with the available capital, resource and power here, it shouldn’t take long before we see some changes. We therefore recommend staying passive with new investments within the healthcare sector, and think that Berkshire Hathaway is a sound investment in any stock climate.

The author owns CVS.

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