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Why CVS is worried about Amazon

A lawsuit filed by CVS against a former employee suggests that major industry players are more worried about Amazon's foray into health care than they initially let on, CNBC reports.

What's happening: Amazon gained a pharmacy arm when it acquired PillPack, and it's also part of the trio that has formed Haven.

  • UnitedHealth has also sued a former employee for attempting to join Haven.

The incumbent companies are worried that Amazon could negotiate directly with insurers, cutting out the need for pharmacy benefit managers.

  • CVS' PBM arm made up about 60% of its overall revenues in 2018.
  • "Given its robust infrastructure, operational capacity, and distribution reach, Amazon-PillPack is uniquely positioned to negotiate directly with payers (insurers) and displace CVS Caremark's mail-based services," CVS argued in a lawsuit to prevent a former employee from working for PillPack.

What's next: CNBC reported last month that there have been talks between PillPack and Blue Cross Blue Shield.

The other side: "It is important to keep in mind that what's being reported here is another company's speculation about our business strategy for a lawsuit to which neither Amazon nor PillPack is a party," a PillPack spokesperson told CNBC.

Go deeper: Read CVS' lawsuit