Amazon agrees to buy PillPack, an online pharmacy

Lynette PayneJun 28, 2018

Amazon has announced plans to acquire PillPack, an online pharmacy that sorts patients' medications into personalized packets that are delivered directly to their door.

Terms were not disclosed on the deal for PillPack, an online pharmacy which operates in all 50 U.S. states and offers pre-sorted dose packaging and home delivery.

The move comes amid speculation that Amazon was planning to get into the pharmacy or drug-distribution business.

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

Amazon did not say how much it was paying for PillPack.

"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.

Its entry into drug distribution is "a warning shot in what is about to become a major battle within the pharmacy space", said Neil Saunders, managing director of GlobalData Retail.

PillPack has raised more than $100 million in investor funding.

The PillPack deal is expected to close during the second half of 2018. "We're excited to see what we can do together on behalf of customers over time".

PillPack, which is aimed at consumers who take multiple medications, presorts customers' prescriptions and helps manage refills and shipping. It has retail operations across the globe, a large cloud computing business, a video service that competes with Netflix and a hardware division that makes devices powered by its digital assistant Alexa, which is available to makers of appliances, cars and other products. Terms of the deal were not disclosed, but TechCrunch reported the deal was for "just under $1 billion". They will also be forced to spend more to try to match Amazon's offerings, he said.

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