Amazon buys online pharmacy PillPack

Amazon buys PillPack an online pharmacy that was rumored to be talking to Walmart		
		
	Ingrid Lunden

       @	   
   	7 hours

The delivery giant announced yesterday (June 28) that it had agreed to acquire PillPack, a U.S. online pharmacy business licensed to deliver pre-sorted medicine doses to patients across all 50 states.

PillPack supplies pre-sorted prescription drugs and other services to people who take multiple medications, a growing market as the US population ages and requires treatment for multiple complex, chronic conditions.

Amazon has widely expected to move into the pharmacy business. The news caused waves in the $560 billion prescription drug industry; shares of publicly-owned drug companies like Walgreens, Rite-Aid, and CVS dropped by 9.4 percent, 13 percent, and 9.2 percent, respectively. But it will face deeply entrenched competition dominated by pharmacies run by CVS Health, Walgreen Boots Alliance and Walmart Inc, and pharmacy benefits provided by CVS, Express Scripts UnitedHealth Group.

A customer walks out of a Walgreens pharmacy store in Austin, TX, U.S., March 26, 2018.

The companies expect to close the deal later this year.

It was precisely the sort of deal that the health care industry had feared.

He said PillPack could be kicked out of current PBM networks, "especially if Amazon has designs of significantly ramping its prescription volume".

"Not only has Amazon finally made a solid move into pharmacy, it has done so via an innovative supplier which helps patients manage and organize their prescription drugs", Saunders said in a research note.

Last year, Amazon gained approval from a number of state pharmaceutical boards to become a wholesale distributor, according to media reports. "It's going to take a long time for them to disrupt the market". Shares of drug wholesalers Mckesson Corp, Cardinal Health and AmerisourceBergen were also down. Both deals are valued at almost $70 billion. Big packaged food stocks also took a hit.

Some analysts played down the immediate threat Amazon poses.

Prescription drugs sales are largely intertwined with groceries and personal items like makeup and shampoo and Amazon already sells bulk packs of latex gloves, bed pads and syringes. It recently began selling medical devices and instruments, as well. That effort ultimately failed and Walgreens purchased the money-losing startup in 2011. The startup has raised upwards of $120 million in funding from backers including TechStars, Menlo Ventures, and Accel. Now, that deal appears to have fallen through as Amazon came through with an undisclosed offer.

Pessina added that physical pharmacies "will continue to be very, very important in the future".

GE left the Dow with the lowest share price and least amount of influence in the index, which is derived from an average of stock prices among constituent companies.

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