ibusinesslines.com November 20, 2018

Expanding healthcare push, Amazon inks deal to buy pharmacy startup PillPack

03 July 2018, 12:44 | Melissa Porter

Expanding healthcare push, Amazon inks deal to buy pharmacy startup PillPack

The Walgreens logo is seen outside the store in Times Square in New York

Amazon on Thursday said it is buying online pharmacy PillPack for an undisclosed sum.

Amazon is acquiring PillPack, an online pharmacy licensed to sell prescription drugs in all USA states, excluding Hawaii.

TJ Parker, PillPack co-founder and Chief Executive Officer also issued a statement saying; "PillPack makes it simple for any customer to take the right medication at the right time, and feel healthier". It's not clear yet what Amazon plans to do with the new business, including whether it will allow the firm to remain independent (as with shoe retailer Zappos) or turn it into the foundation of a bigger health-care push, reports CNNMoney. Stefano Pessina, the boss of Walgreens Boots Alliance, admitted: 'Yes, it is a declaration of intent from Amazon'. McKesson, Cardinal Health and AmerisourceBergen shares were all down after the news.

PillPack, meanwhile, is already licensed to deliver medications to all 50 USA states, helping Amazon clear the regulatory hurdles that might have complicated its foray into the prescription drug industry.

Subject to the usual regulatory approvals and closing conditions, Amazon and Pillpack have said that they expect the deal to close during the second half of this year. "We're excited to see what we can do together on behalf of customers over time", said Wilke. After Amazon's acquisition, Walmart lost 1 percent of its value. PillPack is licensed to ship prescriptions in all 50 states and uses a homegrown system called PharmacyOS to manage the logistics.

The PillPack deal is scaring investors in the top two drugstore chains.

'At this juncture we are not anxious about Amazon's entrance into the prescription market, ' Cantor Fitzgerald analyst Steven Halper said in a note.

Earlier this week, Amazon announced that it hired respected physician and author Atul Gawande to head up the healthcare initiative it launched with Berkshire Hathaway and JPMorgan Chase in January with the goal of providing "high-quality and transparent health care at a reasonable cost".

Now, in an acquisition that could upend the pharmacy market, the retail giant has made its move.

Walgreens bought some of Rite Aid Corp's USA stores a year ago after scrapping its deal to buy the smaller rival outright. Even if PillPack is a network provider today, it does not mean it will be a network provider in the future, especially if Amazon has designs of significantly ramping its prescription volume'.

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