Berkshire Hathaway, headed by real estate mogul Warren Buffett, is teaming up with e-commerce giant Amazon and financial services firm JPMorgan Chase to create a company that will provide more affordable healthcare options to employees.
The news sparked a healthcare stock sell-off from investors wary the initiative could drastically change the market.
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The Dow plummeted nearly 400 points Tuesday morning, CNN reports — the largest dive the index has experienced since May. Pharmacy-benefit managers, pharmacy chains and drug distributors saw the largest drops with CVS shares plummeting 7.6%, while Walgreens dropped 5.7%, MarketWatch reports.
The concept, though still early in its inception, aims to create more affordable solutions for employees and their families, as well as reduce healthcare’s impact on the economy.
“The ballooning costs of healthcare act as a hungry tapeworm on the American economy. Our group does not come to this problem with answers. But we also do not accept it as inevitable. Rather, we share the belief that putting our collective resources behind the country’s best talent can, in time, check the rise in health costs while concurrently enhancing patient satisfaction and outcomes,” Buffett, Berkshire Hathaway's chairman and CEO, said in a statement.
Details regarding the company’s future headquarters and operational details have not yet been released, but will be announced in the near future along with information about the permanent management team, according to the release.
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