Amazon acquires online pharmacy PillPack, reports peg deal at almost $1B

Trevor BaileyJun 29, 2018

But the online retail giant's decision to buy online pharmacy PillPack rapidly accelerates the threat posed to entrenched retailers, suppliers and middlemen.

The online retailer will reportedly pay about $1 billion to acquire PillPack, which delivers prescriptions to 49 states and whose business depends on people who take daily prescription medications.

"We wouldn't be surprised to see pharmacies in Whole Foods at some point", he told the news service.

"PillPack's visionary team has a combination of deep pharmacy experience and a focus on technology", Jeff Wilke, Amazon's chief customer service exec, said in a statement. The deal is expected to close later this year.

"Together with Amazon, we are eager to continue working with partners across the healthcare industry to help people throughout the United States who can benefit from a better pharmacy experience", PillPack co-founder and CEO TJ Parker said in a statement.

Amazon, which has become a retail behemoth since its start as an online bookseller in 1994, is known for its willingness to forego profit, while slashing prices to win customers. The company delivers medications in pre-sorted dose packaging, lifting the burden of sorting doses and scheduling for patients. In April, CNBC reported Walmart Inc. was in talks to buy the company for "under $1 billion", citing unnamed sources.

Shares of drug wholesalers McKesson Corp, Cardinal Health and AmerisourceBergen also fell sharply.

"Together with Amazon, we are eager to continue working with partners across the healthcare industry to help people throughout the USA who can benefit from a better pharmacy experience", T.J. Parker, co-founder of PillPack, said in the press release.

Shares of CVS and Walgreens declined on the news of Amazon's purchase.

Walgreens stock was down 9.46% in pre-market trading.

CVS Health noted that PillPack isn't the only company in the space with drug delivery capabilities.

Some analysts played down the immediate threat Amazon poses.

A September 2016 funding round valued the Boston-based startup at around $360 million, according to venture capital data base PitchBook.

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

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