Amazon makes big foray into health care with PillPack acquisition

Above PillPack

Above PillPack

But the online retail giant's decision to buy online pharmacy PillPack rapidly accelerates the threat posed to entrenched retailers, suppliers and middlemen. Its pharmacy is based in Manchester, N.H., and its business operations are located in Somerville, Mass.

"PillPack's visionary team has a combination of deep pharmacy experience and a focus on technology", Amazon CEO of Worldwide Consumer Jeff Wilke said in a statement.

Amazon is pushing further into pharmacy with a deal to acquire prescription-management service PillPack.

Amazon's purchase of an online chemist that opens an immediate nationwide drug network in the USA has shaved billions off the value of three major pharmacy chains.

PillPack sorts prescription medications into packages based on when doses need to be taken.

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

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Walgreens" chief executive, Stefano Pessina, said he was "not particularly worried" about the PillPack deal in an earnings conference call with analysts on Thursday, describing it only as a "declaration of intent' by Amazon. Shares of Cardinal Health, AmerisourceBergen, McKesson, and Express Scripts all dropped more than 3% on the news. Shares of CVS Health Corp. fell 6 percent, while shares of Rite Aid Corp., which is being purchased by the grocer Albertsons Cos., tumbled more than 11 percent. Evercore ISI analysts wrote that it's now "undeniable" that Amazon is entering the pharmacy industry, according to CNBC's Meg Tirrell.

The three companies said they would use big-data analysis and other high-tech tools to improve care and cut waste.

Bezos already has signaled his frustration with a health-care system characterized by rising costs for consumers and companies, sometimes-poor outcomes, and unnecessary complexity.

Last year, Amazon gained approval from a number of state pharmaceutical boards to become a wholesale distributor, according to media reports.

The selloff in drugstore stocks on Wednesday was reminiscent of the food-industry swoon that resulted in June 2017 when Amazon said it was buying Whole Foods Market Inc. "And I think that that's more likely than not what you're going to see today"'. It counts Accel Partners, Atlas Venture, CRV, Founder Collective, Menlo Ventures, Sherpa Ventures, Techstars among its investors.

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