Amazon’s online pharmacy acquisition proves it’s serious about disrupting healthcare

Amazon’s online pharmacy acquisition proves it’s serious about disrupting healthcare

June 29, 2018 0 By Nazmul Khan


After months of speculation around how Amazon might enter the healthcare market, the e-commerce giant announced today that the company will be acquiring pharmaceutical startup PillPack. The acquisition sent standard brick-and-mortar pharmacy stock prices plunging, and signaled a potentially huge disruption in the United States healthcare market.

The terms of the deal have yet to be disclosed, but TechCrunch reported that the acquisition went for just under $1 billion. In a press release, the companies said they expect to close the deal in the second half of 2018.

PillPack is an online pharmacy startup that provides consumers with prescription medication in prepackaged doses. The company’s website suggests that it is licensed to ship prescriptions in 49 states. The company has also developed its own operational system — PharmacyOS — which organizes patient and pharmaceutical data. “PillPack’s visionary team has a combination of deep pharmacy experience and a focus on technology,” says Jeff Wilke, Amazon’s CEO of worldwide consumers. “PillPack is meaningfully improving its customers’ lives, and we want to help them continue making it easy for people to save time, simplify their lives, and feel healthier. We’re excited to see what we can do together on behalf of customers over time.”

Following this morning’s announcement, stock prices for pharmacies like Rite Aid, Walgreens, and CVS fell dramatically, losing approximately $11 billion in combined market value. Amazon shares gained 2.1 percent after the announcement, earning the company $16 billion in market value on Thursday alone. CNBC reported that Walgreens Boots Alliance CEO Stefano Pessina said in an earnings call this morning, “Yes, it’s a declaration of intent from Amazon… [but] the pharmacy world is much more complex than the delivery of certain [pills or] packages.”

This acquisition isn’t Amazon’s first venture into the healthcare market. In January, Amazon, Berkshire Hathaway, and JPMorgan Chase announced that they would form an independent healthcare company in the United States to rethink healthcare for their own employees. Just last week, the trio announced that renowned doctor and researcher Atul Gawande would be the unnamed company’s CEO. A lot is still unknown as to how the joint venture will operate or what exact role it will play in the market, but its creation paired with the acquisition of PillPack indicates that the e-commerce giant has serious plans for getting involved in healthcare.

It looks as though TJ Parker, cofounder and CEO of PillPack, will stay on to help run the company as well. In a press release earlier today, he said, “Together with Amazon, we are eager to continue working with partners across the healthcare industry to help people throughout the U.S. who can benefit from a better pharmacy experience.”



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