Amazon buys online pharmacy PillPack in latest healthcare push

PillPack prepackages and mails consumers pills.									Pat Greenhouse  The Boston Globe

PillPack prepackages and mails consumers pills. Pat Greenhouse The Boston Globe

The firm also helps to co-ordinate refills and renewals.

Pharmacy shareholders will perhaps find solace in the fact that they're not the only industry to have billions in market value erased by a single Amazon announcement.

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

TJ Parker, PillPack's co-founder and chief executive, said: "Together with Amazon, we are eager to continue working with partners across the healthcare industry to help people throughout the United States who can benefit from a better pharmacy experience".

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

CVS shares tumbled nine percent in opening trading on the news, while Walgreens Boots Alliance slumped 10.5 percent.

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

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Shares of drug wholesalers McKesson Corp, Cardinal Health and AmerisourceBergen also fell sharply.

At the time, Parker argued that the company was working to protect its monopoly on home-delivered prescriptions, which Express Scripts disputed. The deal is expected to close in the second half of 2018, according to a statement from the companies.

"Amazon's acquisition of PillPack is a warning shot in what is about to become a major battle within the pharmacy space", said Neil Saunders, managing director of GlobalData Retail.

Last week, Amazon, JPMorgan Chase and Berkshire Hathaway announced Boston doctor Atul Gawande as the chief executive of the companies' new health care venture, which will be based in Boston.

He added this "is only the first play" in an increasingly aggressive strategy by Amazon for a much more significant role in pharmacy.

'Pharmacy networks are controlled by managed care companies and pharmacy benefit managers with captive mail order capabilities. Walmart was reportedly interested in buying PillPack earlier his year, but Amazon seems to have won out in the end.

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