UPS Acquires Pharmacy License As Amazon Move Looms

United Parcel Service (UPS) acquired a pharmacy license in Georgia in a move that could broaden its business into not only shipping but relabeling drugs, CNBC reported.

XAutoplay: On | OffUPS confirmed the move, saying the license is tied to “new and potential business engagements” handled out of its Duluth, Ga., facility.

It’s not clear how strategically significant the move might be for UPS at a time when the company faces uncertainty as (AMZN), a major customer, tests its own final-mile delivery service, which could be a negative both for shipping rates and volume.

Amazon also is mulling an incursion into the retail prescription-drug business, which also could entail a role in shipping drugs, challenging drug wholesalers like Cardinal Health (CAH) and McKesson (MCK).

Investors didn’t initially interpret the late-day UPS news as a threat to the drug wholesale group. Shares of UPS dipped 0.1% on the stock market today. Amazon climbed 1.5%, while McKesson gained 2.1% and Cardinal Health 2.2%.

Amazon’s footsteps already are prompting potential competitors to react, notably CVS Health (CVS), which is in discussions to buy health insurer Aetna (AET) and has announced plans to roll out next-day delivery in markets across the U.S., with same-day delivery in major markets like New York City.


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