
Confidential documents have recently revealed a controversial deal between Amazon (among other private companies) and the UK government, with Amazon granted a free license to commercialize UK National Health Service data, which will help them to sell pharmaceuticals. Alexa, the voice-controlled home assistant can now provide free health advice, based on NHS guidance notes – the data in question – and then suggest pharmaceutical remedies for sale. Amazon could generate $billions in additional revenues in this new paradigm. Their recent health-tech innovation could be a tipping point for the market, with significant political and commercial consequences.


LONDON, ENGLAND – Boots, the UK’s largest Pharmacy group, is facing the prospect of store closures … [+]
Generations of medical expertise has been distilled into sophisticated NHS guidance notes, which aggregates into millions of hours of expert work. Licensing this data to the world’s most profitable company for free is highly controversial, given the implications on market value, and Amazon’s dominant position. Amazon can now distribute this NHS medical advice, without having to develop its own medical IP. Parallel to this, Amazon is recording and analyzing personal health data exchanged during Alexa interactions, building a sophisticated medical profile on each user, and indeed, aggregated metadata, which can later be sold to third parties. Importantly, Amazon’s health-tech innovation follows its acquisition of PillPack for $753 million in 2018, now rebranded as “Amazon Pharmacy”.
Amazon is making an aggressive push for a share of the UK’s $24 Billion pharmacy market, threatening the closure of many incumbent pharmacies in the process. While the NHS is a public body, the UK’s pharmacy market is largely private, with around 40% run by independents. Boots is the largest UK pharmacy group, with 18% market share, and is already considering store closures.
The principle of the UK government granting Amazon a free license to commercialize this data has generated a political and legal backlash that will likely grow, following a formal legal complaint this week to the European Commission. Lawyer Jolyon Maugham QC, a prominent anti-Brexit campaigner and founder of the Good Law Project has launched a legal challenge this week, hoping to cancel the license with Amazon, arguing that the tech giant should at least pay for access to this data. The UK electorate is hyper-sensitive to the principle of privatisation of the health service, and in this context, his legal challenge is likely to attract substantial political support. The prospect of high street pharmacy closures, job losses and an Amazon monopoly position (helped by the government) will aggravate critics of the world’s largest retailer.
This week’s legal complaint triggers an official inquiry and opens a question over the revocation of the deal. The European Commission has legal power to cancel the license, if found to be in breach of EU State Aid Law, which prevents member states from giving an unfair advantage to private enterprise, through unauthorized subsidy. A State Aid value-limit of €200,000 (£168,600) over three years is set in law, so the argument will likely focus on whether Amazon has received €200,000 of value from the data, or more. The UK is still a member of the EU, and must abide by EU rules. If the data deal is canceled, a new deal could, of course, be proposed by a new government. But future use of the data would be subject to intense public scrutiny.
We can anticipate job losses in UK pharmacies from Amazon’s new push into medicine, and increasing scrutiny of Amazon’s tax advantages, whatever the consequences of this legal challenge. Amazon UK is currently paying less in corporation tax than many medium-sized companies, while boasting UK sales of $14.5bn (£10.9bn) in 2018. This apparent tax advantage does not seem politically sustainable. At the heart of the Amazon story is tension between innovation and public cost. In this instance, the UK government is seeking to save money on healthcare services through innovation, regardless of the commercial and political side effects.
Source: Forbes – Entrepreneurs
Continue reading UK Backlash as Amazon Eyes-up $24 Billion Pharmacy Market, Following Controversial Data Deal with British Government