If the ecommerce giant enters into the retail pharmaceuticals industry, about 10% of pharmacy profits could be at risk, according to Morgan Stanley analysts.

Amazon has reportedly held talks with drugmakers Mylan NV (MYLGet Report) and Sandoz, a unit of Novartis AG (NVSGet Report) . The talks were said to be high level, but Amazon’s plans are not yet clear.

These discussions suggest Amazon “could be taking on either pharmacy, drug distribution, or both,” Morgan Stanley said. Amazon could enter the drug supply chain by opening a retail pharmacy, entering into contracts with generic drugmakers, working with branded manufacturers or building up a…