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Amazon is considering the launch of a new line of business that offers an array of at-home medical tests, and a third-party marketplace for general home diagnostics services, Insider has learned.
Amazon is in talks to first launch its own COVID-19 testing kit in June, potentially around the start of its annual shopping event Prime Day, according to people directly involved in the matter. In March, the Food and Drug Administration gave clearance for Amazon's at-home COVID testing product, developed by Amazon's subsidiary STS Lab Holdco.
Additionally, Amazon could expand to offer testing kits for other infections, including respiratory and sexually transmitted diseases. Amazon's long-term goal is to expand into other areas like clinical genomics, and launch a third-party marketplace that sells medical tests from other companies, these people said.
The initiative is led by the team that built Amazon's in-house COVID-19 testing lab, internally codenamed Project Ultraviolet, current employees and industry sources told Insider. The team is already being referred to as "Amazon Diagnostics" internally, and could start using the Diagnostics brand publicly when the testing kits launch. Cem Sibay, VP of Amazon Labs, is overseeing Project Ultraviolet, as Insider previously reported.
The plans are still in discussion and it's possible the launch could get delayed or canceled entirely, these people said.
Plans for Amazon's new home medical testing products represent the retail giant's first foray into the health diagnostics space. It's part of Amazon's ongoing expansion into the broader healthcare industry, which now includes Amazon Pharmacy, an online pharmacy service, and Amazon Care, a telehealth service for its employees and other companies. Amazon also released its first health wearable device called Halo last year. On Monday, it announced a new employee wellness program called WorkingWell.
Amazon also previously partnered with JP Morgan and Berkshire Hathaway on a healthcare venture, Haven, which disbanded in January. It also once considered acquiring Confer Health as part of its plan to get into the health diagnostics space, CNBC previously reported.
The retail giant's potential expansion into health diagnostics shows the next phase of growth for its in-house COVID testing lab as more people get vaccinated and the threat of the pandemic starts to subside in the US. Amazon previously said it's spent "hundreds of millions of dollars" in building the lab, and the new diagnostics initiative could help the company capitalize on its investments even after COVID is over, these people said.
In an email to Insider, Amazon's spokesperson said, "Amazon decided early on during the pandemic that COVID-19 testing would be a critical tool to ensure the health and safety of front-line employees. Since then, we have been working closely with the FDA to build and enable large scale testing capacity using a state-of-the-art lab we built from scratch — creating new testing capacity at no cost to the healthcare system. We continue to innovate to support the safety of our employees, their families, and the communities where they live."
Highly confidential projectThe diagnostics team at Amazon currently has at least 300 people, mostly recruited internally, and runs as a highly confidential project, one of the people said. This person added that people who joined the team consider the job a step-up in their careers at Amazon, as the company's S-team, a group of its most senior leaders, is directly involved. Doug Herrington, SVP of North America Consumer, is the S-team member overseeing the project.
Project Ultraviolet first formed last April to focus on building Amazon's in-house COVID-19 testing lab, as Insider previously reported. In February, Amazon announced its testing lab in Kentucky had processed more than one million COVID-19 tests for front-line employees from more than 700 testing facilities. Earlier this year, Amazon's retail CEO, Dave Clark, wrote a letter to President Biden offering to help with the administration's vaccination efforts.
The team has discussed debuting Amazon's first COVID-19 testing kit on Prime Day, the company's annual shopping extravaganza expected to take place in June this year. Prime Day's increased traffic makes it an attractive promotional opportunity, and at least one internal estimate shows 10,000 units being sold that day, according to these people. But there are also concerns about negative publicity for trying to capitalize on the pandemic, they said. Amazon hasn't announced the exact date of this year's Prime Day, but internally, June 21 is used as the tentative start date, these people said.
There are several long-term plans for Amazon Diagnostics, including a potential third-party marketplace for home tests and genomic testing, these people said. The marketplace would have third-party labs offering diagnostic tests directly to consumers through a website called Amazon Dx. The site, Amazondx.com, is currently used for Amazon's own employee COVID-19 tests.
Home diagnostics is an already crowded space. Amazon's move could bring the company to compete with testing giants Quest and LabCorp, as well as smaller health vendors. In genetic testing, Amazon would be competing with 23andme, Ancestry, and Color Genomics, among others. Amazon also lags behind other retailers in COVID testing, like Kroger, Walmart, and Albertsons, which launched their own home-testing services for general consumers over the past year.
The launch of a new Diagnostics brand would give Amazon three main units within the healthcare space, alongside Amazon Pharmacy and Amazon Care. Three people said there have been discussions to integrate the three brands more closely together, but due to their different goals and incentives, no concrete plans have been materialized.
Blake Dodge contributed reporting.
Do you work at Amazon? Contact reporter Eugene Kim via encrypted messaging apps Signal/Telegram (+1-650-942-3061) or email (ekim@businessinsider.com).
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