Published: Fri, June 29, 2018
Medicine | By Debra Reynolds

Amazon sends pharmacy stocks tumbling after snapping up online chemist

Amazon sends pharmacy stocks tumbling after snapping up online chemist

Amazon has acquired Somerville-based PillPack, a pharmacy startup, the companies said today. The five-year-old company manages multiple prescriptions for customers by pre-sorting, packaging, and delivering drugs with a round-the-clock staff that can be contacted online or by phone.

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

Founded out of Boston in 2013, PillPack invites customers to sign up online, and the company then dispatches "over-the-counter" and prescription medications in individual packs organized by date and time. Apparently Walmart was also interested in buying PillPack and was outbid by Amazon.

The acquisition marks the second time that Amazon has purchased a company that counted Queensbridge Venture Partners as an early investor.

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The online retail giant also announced a joint venture with JPMorgan Chase and Berkshire Hathaway aimed at lowering health costs for the companies' USA employees. Beyond a joint press release, Amazon declined to disclose terms of the deal or comment on how the business would be integrated.

The move comes amid speculation that Amazon was planning to get into the pharmacy or drug-distribution business. "PillPack makes it simple for any customer to take the right medication at the right time, and feel healthier", its cofounder and CEO TJ Parker said in a press release.

The three companies said they would use big-data analysis and other high-tech tools to improve care and cut waste.

PillPack fits nicely into Bezos' broader healthcare goals, but it's possible that the startup remains exclusively in Amazon's realm. PillPack is authorized to ship drugs in 49 states, according to Reuters. Shares of Walgreens, CVS, and Rite Aid plunged Thursday, collectively losing $12.8 billion, according to CNBC.

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Shares of drug wholesalers, like those of AmerisourceBergen, McKesson and Express Scripts, also took a smaller hit following news of the deal.

"However, we have learned never to discount a potential Amazon entrance into any market", the analyst said.

PillPack has raised $118 million in venture capital funding. It's raised more than $118 million from brand-name investors including Accel, Sherpa Capital and NY rapper Nas's Queensbridge Venture Partners.

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