Amazon moves to disrupt pharmacy sector with new acquisition

Pillpack

Amazon.com Inc. said that it had agreed to buy online pharmacy PillPack in a deal that will further the retail giant's ambitions in health care.

Terms were not disclosed on the deal for PillPack, an online pharmacy which operates in all 50 U.S. states and offers pre-sorted dose packaging and home delivery. The startup, which was founded in 2013, ships medications to people in the United States in pre-sorted dose packaging and caters to people who take multiple prescriptions a day.

Amazon was widely expected to move into the pharmacy business.

Bezos been thinking about the drug business for almost two decades; in 1999, Amazon purchased a stake in Drugstore.com.

"This is incredibly bad news for traditional players, like Walgreens and CVS, who stand to lose the most from Amazon's determination to grow its share".

In its latest financial report, published today, Walgreens Boots Alliance said its retail sales had also fallen - by 1.3% - in this division, which was "mainly due to Boots UK".

Jones' Queensbridge Venture Partners was an early investor in the prescription drug delivery service. The parties expect to close the transaction during the second half of 2018.




The deal comes as the health care industry is undergoing a series of convulsions in response to rising costs and pressure on drug makers, pharmacy benefit managers, and insurers. The service is aimed at people taking more than one prescription drug every day.

PillPack, which is closely held, also has software that automates many routine pharmacy tasks, such as verifying when a refill is due, determining co-pays, and confirming insurance.

It's not clear yet just what Amazon plans for PillPack.

Some analysts played down the immediate threat Amazon poses.

"I think this move jump-starts efforts and clears some hurdles [for Amazon], and what it's really going to do is fast-track any moves they want to make to get licensed", Rea said.

A September 2016 funding round valued the Boston-based startup at around US$360 million, according to venture-capital database PitchBook.

The company had attracted interest from Walmart Inc, which was looking to buy it for under $1 billion, CNBC had reported in April. Another $3 billion in lost stock market value.

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