Published: Tue, July 03, 2018
Medical | By Marta Holmes

Amazon to buy PillPack in move into pharmacy

Amazon to buy PillPack in move into pharmacy

The acquisition follows months of rumors that Amazon was eyeing consumer healthcare services, particularly the pharmacy space.

"We're excited to see what we can do together on behalf of customers over time".

PillPack, which was founded in 2013, is available in every U.S. state except Hawaii and past year said it expected to make $100 million in revenue. Boylan said he thinks any impact Amazon has on the health care system will take time to unfold.

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.

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Lekraj noted that PillPack's business is geared largely toward patients with recurring medication needs, which, as a group, tend to be older, and many of those people still prefer to go to bricks-and-mortar pharmacies.

PillPack runs a platform known as PharmacyOS, which manages patient data and figures out how to even out prescription drugs in safe doses for customers. The slump in Walgreens shares is likely to weigh on the Dow Jones Industrial Average, which just added the stock to its index of 30 companies, replacing General Electric Co.

The announcement comes one week after Amazon, JPMorgan Chase and Berkshire Hathaway revealed the CEO of their new healthcare tech company.

"We already have the capabilities that PillPack is offering and we have scale in the business", a company representative told CNBC.

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

"The pharmacy world is much more complex than just delivering certain pills or certain packages", Pessina said.

Some analysts played down the immediate threat. Customers can use the technology to contact pharmacists that can answer questions. But it also has pharmacy licenses in all 50 states and other infrastructure that could eventually help Amazon to expand broadly into the pharmacy arena. Recently, Walmart was reportedly eyeing PillPack and willing to pay close to $1 billion.

"This now means that the retail side of the business is largely incapable of driving footfall into stores which could help support the prescription and pharmacy side of the business". In 2016, the pharmacy benefits company Express Scripts Holding Co. threatened to drop PillPack from its list of approved vendors because of its focus on delivery over storefront retail.

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