SEATTLE, Washington: Amazon.com has agreed to purchase U.S. primary care provider One Medical for $3.49 billion.

As Amazon continues its expansion into U.S. healthcare at an increasingly rapid pace, the all-cash deal would combine two relatively small players in the sector.

Before offering services to other employers under the Amazon Care brand, the online retail giant first piloted virtual care visits for its own staff in Seattle in 2019.

In 2018, it bought online pharmacy PillPack, which became a prescription delivery and price-comparison site it later launched.

“We think healthcare is high on the list of experiences that need reinvention,” said Neil Lindsay, senior vice president of Amazon Health Services, as quoted by Reuters.

The Seattle-based retailer said it aims to improve and speed up care, though major innovations have yet to emerge.

In One Medical, Amazon is acquiring a loss-making company with 767,000 members and industry clients, such as Airbnb and Google.

By comparison, rival company Teladoc Health has more than 54 million paying members in the U.S. and double One Medical’s quarterly revenues.

Shares in Teladoc, as well as drugstore retailers CVS Health Corp and Walgreens Boots Alliance, were down between 0.3 percent and 1.8 percent after news of the Amazon deal was released.

“The acquisition makes sense, as the blending of virtual and in-person care is core to both One Medical and Amazon Care’s strategy,” noted Citi analyst Daniel Grosslight, according to Reuters.

Meanwhile, U.S. Senator Amy Klobuchar, Chairwoman of the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights, urged the Federal Trade Commission to investigate Amazon’s proposed deal, expressing concerns over the acquisition’s implications for personal health data.

In a statement, Klobuchar said, “Amazon has a history of engaging in business practices that raise serious anticompetitive concerns, including forcing small businesses on its site to buy its logistics services as a condition of preferred platform placement, and using small businesses’ non-public data to compete against them.”