Jason Gorevic, CEO of Teladoc

Scott Mlyn | CNBC

Shares in Teladoc, a provider of virtual doctor visits, fell as much as 8% on Wednesday after Amazon announced it was rolling out its telemedicine service to its employees on a national basis.

The company’s share closed more than 4%.

Launched as a pilot two years ago, Amazon Care will give employees in all 50 states access to virtual emergency visits and free telemedicine consultations starting this summer. The company plans to offer its health program to other employers across the country.

Telehealth was one of the massive growth stories over the past year as consumers looked for alternatives to traditional doctor visits to help slow the spread of Covid-19. This resulted in growth and an increase in user numbers for Teladoc, a leader in space. As of Wednesday’s announcement, the company’s stock was up more than 70% year over year.

However, Amazon’s new company could jeopardize Teladoc’s services as it continues to roll out.

Amazon also has a history of scared investors when it comes to opening up new space.

Last November, the company sent stocks of traditional pharmacy giants and GoodRx, a company that finds prescription drugs for users at a discount, and crashed after the launch of Amazon Pharmacy. When Amazon announced the acquisition of Whole Foods in 2017, inventory levels at grocery and wholesale crate dealers also fell.

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