Amazon makes big foray into health care with PillPack acquisition

Amazon buys PillPack an online pharmacy that was rumored to be talking to Walmart		
	Ingrid Lunden

   	7 hours

Amazon is buying online pharmacy PillPack, and the main pharmacy stocks are getting whacked.

When the Jeff Bezos-led juggernaut announced it would buy PillPack, an online pharmacy, Walgreens shares dropped immediately.

"We are not particularly anxious", Pessina said, but added that the company was not complacent either.

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.

CVS shares tumbled 8.6 percent in pre-market trade on the news, while Walgreens slumped 8.5 percent.

"We want to help them continue making it easy for people to save time, simplify their lives, and feel healthier".

Here's how PillPack works: Users receive a monthly roll of pre-sorted medications with labels that include photos and instructions. This system is particularly convenient for people who require ongoing repeat prescriptions, as PillPack arranges the refills and renewals on behalf of the patient. It had raised $123 million in financing, most recently $5 million in debt from TriplePoint Venture Growth in August 2017, according to data from industry research firm PitchBook.

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.

PillPack, which launched in 2014, is available in every U.S. state except Hawaii.

The damage also spread through the pharmacy supply chain, with drug wholesalers seeing deep losses. And CVS is acquiring insurer Aetna in a bid to strengthen its business managing pharmacy benefits in the face of new competition. Once the deal closes, Amazon could potentially start selling prescription drugs directly through its site, delivering them via mail and impacting retail pharmacies. It has also laid plans for a major new office with 900 workers in Fort Point.