Amazon is pushing further into pharmacy with a deal to acquire prescription-management service PillPack. Terms of the June 28 deal were not disclosed.
PillPack sorts prescription medications into packages based on when doses need to be taken. It also handles deliveries, refills, and adjustments to medications. The startup was founded in 2013 in Boston, a hub for healthcare training and technology. 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.
PillPack was reported in April 2018 to be in talks to be acquired by Walmart, for a price of less than $1 billion. Walmart was also said to be talking with Medicare insurer Humana around that same time.
Amazon struck fear into the hearts of medical and pharmaceutical companies in January, when it announced plans to launch a low-cost, independent healthcare company for employees in partnership with JPMorgan and Berkshire Hathaway. The announcement erased $30 billion in market value for the biggest names in health care in a matter of hours. Last week, Amazon, JPMorgan, and Berkshire named doctor and magazine writer Atul Gawande CEO of their health care venture.
Amazon’s healthcare ambitions have been rumored since at least last year. In the first half of 2017, Amazon began selling medical supplies in the US and ramped up its recruiting for businesspeople in the healthcare space. By October, the e-commerce giant had been approved for wholesale pharmacy licenses in at least 12 states.
Anxiety over Amazon’s encroach on pharmaceuticals was widely thought to be behind CVS Health’s December 2017 bid to buy Aetna, one of the largest US health insurers, for $69 billion. That deal is still being reviewed by regulators, with CVS CEO Larry Merlo recently saying he expects it to close later this year.
Shares of major healthcare companies were down as much as 10% in morning trading. Amazon’s stock climbed a modest 1% to around $1,670 at the time of publishing.