Amazon’s $1B Purchase Of PillPack Offers Another Hint At Company’s Ambitious Health Care Plans
Amazon announced that it is buying PillPack, which sells pre-sorted packets of prescriptions drugs, delivering them to customers in their homes. The news seemed to be a confirmation of the worst fears of some in the industry -- that Amazon is going to make an aggressive play for a chunk of the pharmacy business. But actually disrupting the health care industry will be a challenge.
The New York Times:
Amazon To Buy Online Pharmacy PillPack, Jumping Into The Drug Business
In the world of health care, PillPack, an online pharmacy, is a pretty small player. Its work force of 1,000 or so people pales in comparison with the 235,000 who work for Walgreens. But when Amazon announced on Thursday that it was buying PillPack, the deal immediately shook the industry. Shares of Walgreens and Rite Aid tumbled more than 9 percent, while CVS Health dropped 6.6 percent. That’s because with one move, Amazon answered the question about when — and how — it would grab a piece of the $560 billion prescription drug industry. (Ballentine and Thomas, 6/28)
Reuters:
Amazon To Buy PillPack In Potentially Disruptive Drug Retail Push
The deal's potential to disrupt major players across the drug supply chain nationwide prompted a sell-off in shares of possible rivals, while sending Amazon shares up 2.5 percent. PillPack supplies pre-sorted prescription drugs and other services to people who take multiple medications, a growing market as the U.S. population ages and requires treatment for multiple complex, chronic conditions. Amazon is vying for a share of what is a more than $450 billion total U.S. prescription drug market, according to research firm IQVIA. (Rai and Banerjee, 6/28)
The Wall Street Journal:
Behind PillPack’s $1 Billion Sale, A Frustrated 32-Year-Old Pharmacist
TJ Parker grew up working the counter for his father’s pharmacy in Concord, N.H., where he became frustrated by how much customers struggled to keep track of their medications. He went to pharmacy school but rather than take up the family business, he and a friend set out to change it. In 2013, they launched an online pharmacy from Manchester, N.H. On Thursday, the 32-year-old CEO said he sold his startup to Amazon.com Inc. It was a roughly $1 billion deal, according to people familiar with the deal. Mr. Parker is expected to stay involved after the deal, said a person familiar with the matter. (Brown and Terlep, 6/28)
Stat:
Amazon’s Acquisition Of PillPack Not A Fatal Blow To The Pharmacy Industry
The announcement of this deal is the first step on a long and crooked path, and there is no guarantee that Amazon (AMZN), for all its size and success, will quickly become a major player in the nation’s $370 billion drug business. The acquisition of PillPack confirms Amazon’s intention to sell prescription drugs to consumers nationwide. With a primary pharmacy located in Manchester, N.H., PillPack has operations across the country and ships prescription drugs in pre-sorted packets to 49 states (the only exception being Hawaii). (Ross, 6/28)
Stat:
Amazon Is Taking On Health Care’s Most Vexing Challenge: The Chronically Ill
The company’s acquisition of the home delivery pharmacy PillPack is entirely separate from its venture with JPMorgan Chase and Berkshire Hathaway to improve and lower the cost of care for the companies’ 1 million employees. But taken together, the two initiatives realize the worst fears of many of the health care industry’s entrenched incumbents — that Amazon is making an aggressive play in portions of the market that many consumers, investors, and health industry specialists see as ripe for disruption. (Ross, 6/29)