Retail boxes move along a conveyor belt inside an Amazon fulfillment center in Robbinsville, N.J. (David Williams/Bloomberg News)

Amazon has been expanding its medical supply business — selling gloves, syringes and other health-care sundries to dentists, doctors and hospitals — in an early sign of its efforts to enter the health-care industry.

Unlike Amazon’s secretive plans to shake up the prescription drug industry, or its initiative to develop technology tools to rein in health costs for its own employees, Amazon has not hidden this effort. In an earnings call in October, an executive mentioned hospitals first on a laundry list of institutions Amazon was targeting with its Amazon Business offering, along with schools, labs and government agencies.

On Tuesday, the stocks for companies that distribute medical supplies tumbled after the Wall Street Journal reported Amazon has been holding meetings with hospital executives to learn more about the needs of the industry.

Brian Tanquilut, an equity analyst at the investment firm Jefferies, said Amazon's play to sell commodity medical supplies, such as medical gowns and masks, has been going on for some time. It is seen as a good entry point to health care because it does not involve complex regulatory approvals; many states do not require a license at all. Amazon has been particularly aggressive, he said, in courting dentists, setting up booths at dental conferences.

“They see health care as a very big market; it’s one of the growth markets in the economy that they do not have a toehold in. They look at areas where it’s relatively easy to get into without high-level government level scrutiny, and this is kind of the low-hanging fruit, in health care entry,” Tanquilut said.

An Amazon spokeswoman did not answer questions about how much of its business marketplace sales include medical products, but there are 1 million users of Amazon Business across many industries and 85,000 sellers. (Jeffrey P. Bezos, the founder and chief executive of Amazon, owns The Washington Post.)

Phyllis McCready, chief procurement officer at Northwell Health, a large New York-based health system with 23 hospitals and more than 650 outpatient facilities, said Amazon has reached out to hospitals like hers, which is not unusual when companies enter a new market.

McCready oversees an 850,000-square-foot medical supply distribution center for a health system that purchases $650 million in medical and surgical supplies each year. She said Northwell contracts directly with manufacturers and, to a lesser extent, distributors. Northwell does not use Amazon Business to buy medical supplies.

The big advantage of directly negotiating with manufacturers is the full visibility McCready gets into where a product was made and where it has been — essential information for tools involved in patient care.

“The chain of custody — the pedigree of where it starts, where it ends up. Quality is number one. To have quality products, we have to make sure they're coming from the right places,” McCready said.

That issue may be far less important in Amazon’s consumer business, where people may be satisfied with products based largely on their prices and may not question where a product was made or how it arrived.

Tanquilut said some medical supply distributors, particularly those that do not have a second line of business distributing drugs, have been under pressure from increased competition. Owens & Minor, Cardinal Health, McKesson and Medline Industries are other competitors in the space. At the J.P. Morgan Health Care Conference in San Francisco, Cardinal Health chief executive Mike Kaufmann stressed his company’s prices were lower than others. On an earnings call last year, Owens & Minor chief executive Paul Cody Phipps described it as a “pretty challenging environment ... where everybody is chasing market share, and that’s put pressure on margins.”

For physician practices, Amazon might be able to provide faster turnaround when there is an immediate need for supplies, Tanquilut said. He said his research suggests the tech giant was processing medical supplies at an Amazon facility in Indiana where consumer goods are sent out the same day they are ordered. But if Amazon decides to extend its business into higher-risk medical devices or even prescription drugs, which depend on secure distribution and stable storage conditions, it may not make sense to run medical devices on the same line as diapers.

McCready said she has been interested in Amazon’s technology-oriented solutions and the company’s supply chain expertise, even though she is not using the company for medical supplies.

“Amazon is a technology company and a logistics company, and they do both of those well. One of the things in health care is I don’t know if our technology is where it should be,” McCready said. “We’re always thinking ahead, thinking about the future, the next 50 years.”

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