JUN 29, 2018 05:36 AM PDT

Amazon Buys Online Pharmacy PillPack, Drugstore Stocks Tumble

WRITTEN BY: Julia Travers
3 1 89

On June 28, 2018, the web retail giant Amazon announced it was acquiring an online pharmacy company called PillPack. Amazon’s entry into the prescription and pharmacy field caused a quick drop in drugstore stocks on the same day, including Rite Aid, Walgreens Boots Alliance and CVS Health, which fell 11.1, 9.9 and 6.1 percent, respectively. Patients in the U.S. order billions of prescriptions that cost hundreds of billions annually, and the business of filling them is understandably a very competitive industry.

Jeff Wilke, Amazon CEO of Worldwide Consumer, said the following in a statement:

PillPack’s visionary team has a combination of deep pharmacy experience and a focus on technology. 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. We’re excited to see what we can do together on behalf of customers over time.

Image of pills, credit: public domain

PillPack’s online services include handling patient data and measuring, packaging and delivering the correct doses of medicine. It is licensed to do so in 49 states, its site states. PillPack uses an operating system called PharmacyOS to administer patient prescriptions, including managing potential medication interactions.

PillPack sorts a user’s medicine into prepackaged doses that can be labeled by day and time. They coordinate with doctors to auto-refill drugs for patients. The company states that about 50 percent of Americans don’t take their meds as described and that it aims to remedy the situation.

For the time being, PillPack co-founder and CEO TJ Parker is expected to stay on board after the acquisition.

“PillPack makes it simple for any customer to take the right medication at the right time, and feel healthier,” he said in a statement.

Walgreens Boots Alliance CEO Stefano Pessina recognized the import of the deal between Amazon and PillPack but expressed confidence in her stores, saying “the pharmacy world is much more complex than the delivery of a certain [pills or] packages,” according to CNBC.

CVS Health also communicated comfort in the import and necessity of their services, adding that they have not seen a major move toward patients preferring home delivery for their prescriptions. In a comment to CNBC, a company rep said:

We already have the capabilities that PillPack is offering and we have scale in the business … And for those patients that do desire to transition [to online services], we offer the option to ship their prescriptions to their home from our pharmacies or obtain the prescriptions through our Caremark mail facilities.

PillPack, which was valued at about $361 million after a 2016 funding round, was previously considering a deal with Walmart, according to Tech Crunch. The company is based out of New Hampshire and originated out of a startup accelerator called Techstars in Boston in 2013.

 

Sources:

Tech Crunch

CNBC

PillPack

About the Author
  • Julia Travers is a writer, artist and teacher. She frequently covers science, tech and conservation.
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