Amazon makes big foray into health care with PillPack acquisition

Pillpack

Above Pillpack

FILE PHOTO: The Walgreens logo is seen outside the store in Times Square in NY, U.S., July 5, 2016.

With its far-reaching and widely popular online site, Amazon moves closer to establishing beachheads in medicine chests across the US and using that muscle to alter the traditional playbook for prescription drug distribution.

Building on some of those ideas, PillPack set out to help people who use multiple prescriptions better manage the process.

It expects to complete the deal in the second half of the year. "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".

Shares of Walgreens and CVS Health Corp. fell in pre-market trading.

Shareholders suffered jitters after Amazon closed a deal with PillPack, which sells prescriptions in every USA state except Hawaii. It also handles deliveries, refills, and adjustments to medications.

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"PillPack's visionary team has a combination of deep pharmacy experience and a focus on technology", noted Jeff Wilke, Amazon CEO for worldwide consumer.

'Together with Amazon, we are eager to continue working with partners across the healthcare industry to help people throughout the U.S. who can benefit from a better pharmacy experience, ' Parker said in a statement.

PillPack says it holds pharmacy licenses in all 50 states, meaning Amazon could become the de facto pharmacy delivery service for Prime members and beyond.

With its user-friendly packaging and design, PillPack has shaken up the pharmacy business, generating more than $100 million in revenue a year ago.

Of course, Amazon is in the midst of developing a joint healthcare venture in partnership with the CEOs of Berkshire Hathaway and JP Morgan Chase. Shares of Cardinal Health, AmerisourceBergen, McKesson, and Express Scripts all dropped more than 3% on the news. Apparently Walmart was also interested in buying PillPack and was outbid by Amazon.

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