Amazon to acquire PillPack online pharmacy

Grant Boone
June 28, 2018

"PillPack's visionary team has a combination of deep pharmacy experience and a focus on technology", said Jeff Wilke, head of Amazon Worldwide Consumer. Earlier this year, the technology giant announced its move into USA employee health care via a partnership with Berkshire Hathaway and JPMorgan, while reports have been surfacing for a while that it was looking to enter the lucrative pharmaceutical realm. News of the acquisition is also a bitter pill to swallow for Walmart, which was said to be looking into buying PillPack for under $1 billion earlier this year, according to CNBC. "We're excited to see what we can do together on behalf of customers over time". The company is aimed at people who take multiple prescriptions, offering services like pre-sorted dose packaging and home delivery.

The news sent the shares of drugstore giants CVS Health (cvs), Walgreens Boots Alliance (wba), and Rite Aid (rad) plunging between 8% and 10%.

"Together with Amazon, we are eager to continue working with partners across the health care industry to help people throughout the U.S. who can benefit from a better pharmacy experience", PillPack chief executive TJ Parker said in a statement. "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". Startups like San Francisco-based Nimble Pharmacy, which recently expanded to Seattle, are also taking a swing at the space.

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Parker grew up behind the counter of his father's drug store in Concord, N.H., and has spoken of his exasperation seeing customers resort to spreadsheets to figure out how to schedule and sort their medications. The firm also helps to co-ordinate refills and renewals. The deal is expected to close later this year.

The company's backers include Accel Partners, Atlas Venture, CRV, Founder Collective, Menlo Ventures, Sherpa Ventures and Techstars.

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