Amazon, Berkshire Hathaway, and J.P. Morgan Chase are forming a not-for-profit health care venture to lower health care costs for their U.S. employees, the companies announced Tuesday morning, sparking a slide in the shares of a host of health care-related companies.
The initial focus of the independent company will be on technology that will provide their U.S. employees and their families with simplified and high-quality health care at accessible costs, the companies said.
“The ballooning costs of health care act as a hungry tapeworm on the American economy,” Berkshire Hathaway (brk-b) chairman and CEO Warren Buffett said in a statement. “Our group does not come to this problem with answers. But we also do not accept it as inevitable.”
The move comes amid growing speculation that Amazon is likely to enter the prescription drug business and that has sent tremors through the pharmaceutical supply chain.
“The health care system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” Jeff Bezos, Amazon (amzn) founder and CEO, said in the statement. “Success is going to require talented experts, a beginner’s mind, and a long-term orientation.”
The effort is in its early planning stages, the companies said, and the initial formation of the company would be led by Todd Combs, an investment officer of Berkshire Hathaway; Marvelle Sullivan Berchtold, a managing director of J.P. Morgan Chase; and Beth Galetti, a senior vice president at Amazon.
“Our people want transparency, knowledge and control when it comes to managing their health care,” said Jamie Dimon, chairman and CEO of J.P. Morgan Chase (jpm). “The three of our companies have extraordinary resources, and our goal is to create solutions that benefit our U.S. employees, their families and, potentially, all Americans.”