scorecardUnitedHealth is suing a former executive to protect company secrets from Amazon
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UnitedHealth is suing a former executive to protect company secrets from Amazon

UnitedHealth is suing a former executive to protect company secrets from Amazon
LifeScience4 min read

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Optum, UnitedHealth Group's thriving health IT arm, is suing a former executive to prevent him from taking company secrets to the joint venture (JV) formed by Amazon, Berkshire Hathaway, and JPMorgan Chase, per Axios.

Optum revenue continued on upward trajectory in 2018

Optum's lawsuit alleges that the former Optum executive - who the JV hired in December 2018 - printed out documents on Optum's corporate strategy the same day he interviewed with the Amazon JV in October 2018.

The lawsuit is a glaring indicator that UnitedHealth views the Amazon JV as a legitimate threat. Amazon, Berkshire, and JPMorgan sent shudders through the healthcare industry when they launched their JV in January 2018 and announced their broad intentions to reduce US healthcare costs. As the largest health insurance company in the US, UnitedHealth can likely withstand Amazon's healthcare play better than most incumbents - but it still has good reason to keep a close eye on the JV.

For example, the corporate trio employs more than 1 million workers, giving the JV a solid starting point if it decided to go after incumbent insurers' members. In comparison, much-hyped health insurance startup Oscar Health still only has about 230,000 members seven years after launching, according to a December 2018 CNBC report.

Further, Amazon acquired pharmacy startup PillPack in June 2018; while Amazon's precise plans for PillPack are unclear, it may look to undercut existing pharmacy benefits managers (PBMs), which serve as intermediaries between pharmacies and insurers. And OptumRx - a subsidiary of UnitedHealth - is one of the three largest PBMs in the US.

Amazon's top of mind for many other incumbents too: We've also seen CVS, Walgreens, and Walmart take measures to stave off Amazon within the past year.

 

 

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