Amazon Acquires Rx Delivery Service to Disrupt the Entire Pharmacy Industry

Amazon on Thursday announced plans to acquired PillPack, an online pharmacy and medication delivery service.

PillPack lets users purchase prescriptions in pre-made doses, which are then delivered in personalized packets to a customer’s doorstep. The service also helps coordinate refills and renewals, and ensures that medications are delivered on time.

The exact terms of the merger haven’t been disclosed by Amazon or PillPack, but sources close to the deal told TechCrunch that it was for “just under” $1 billion. In a press release, Amazon called it a “definitive merger agreement.”

“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,” said Jeff Wilke, CEO of Amazon Worldwide Consumer.

PillPack has licenses to operate in all 50 states, but currently not internationally. It also developed and maintains an online platform called PharmacyOS for viewing patient data and managing medications.

Previously, the online pharmacy was rumored to be discussing a merger with Walmart — one of Amazon’s biggest rivals in the retail market. But, as TechCrunch points out, Amazon “came along offering more.”

The move speaks volumes about Amazon’s broader ambitions, specifically in the e-health market. The retail giant has been targeting new industries and spheres to expand in what appears to be an effort to become a one-stop-shop for anything a consumer might want or need.

Not that the move was necessarily surprising. Analysts and market watchers have long imagined Amazon would attempt to disrupt the pharmacy business.

Back in May 2017, the company was said to be hiring people related to that industry. And Amazon has been granted approval to obtain wholesale pharmacy licenses in at least 12 states, the St. Louis Post-Dispatch reported last October.
 

But while the merger is great news for Amazon, it probably isn’t going to bode well for traditional brick-and-mortar pharmacies.

According to CNBC, shares of drugstore companies plummeted Thursday after news of the Amazon-PillPack merger spread. Collectively, Rite Aid, Walgreens and CVS lost about $11 billion in market value on Thursday alone.

The merger deal is expected to be finalized by the second half of this year.

“We’re excited to see what we can do together on behalf of customers over time,” Amazon’s Wilke said.