Amazon gets a drug distribution beachhead in PillPack buy

Amazon gets a drug distribution beachhead in PillPack buy

CVS Health noted that PillPack isn't the only company in the space with drug delivery capabilities.

PillPack supplies pre-sorted prescription drugs and other services to people who take multiple medications, a growing market as the USA population ages and requires treatment for multiple complex, chronic conditions.

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

Why it matters: The acquisition represents Amazon's biggest move yet into the healthcare sector and threatens the traditional retail pharmacy model in a major way. Bloomberg reported that an unnamed source with knowledge of the matter said that Amazon will pay about $1 billion for PillPack.

CVS reported prescription sales of $59.5 billion previous year, and Walgreens sold $57.8 billion worth of drugs in its fiscal 2017.

After the announcement, £2.3 billion was wiped off the value off groceries giant Walmart, £3.5 billion off drugstore rivals CVS Health and Rite Aid and £2.6 billion off distributors McKesson, Cardinal Health and AmerisourceBergen.

PillPack has pharmacy licenses in all 50 states.

If Amazon can carve a $15 billion chunk out of just three companies with a $1 billion deal, just think of the damage it could inflict once it starts throwing around more money.

The iShares U.S. Healthcare Provider ETF, or IHF, absorbed over $255 million worth of trades on Thursday, the most in nearly a decade and a whopping 46 times the average daily turnover for the past year.

Walgreens" chief executive, Stefano Pessina, said he was "not particularly worried" about the PillPack deal in an earnings conference call with analysts on Thursday, describing it only as a "declaration of intent' by Amazon.

Health care stocks fell after said will buy online pharmacy PillPack.

Amazon recently announced that it had teamed up with JPMorgan and Berkshire Hathaway for a healthcare joint venture and just a week back, the partners appointed a CEO for the venture. "I think there's the potential for (this to be) a very powerful deal, a powerful acquisition".

Express Scripts dropped PillPack from its network in April 2016, alleging that it had misrepresented itself as a retail pharmacy.

The move is aimed to improve health care for the three companies' more than a million combined US employees and also at the same time make it more cost-effective.