With $1B Purchase of PillPack, Amazon Fulfills Its Pharmacy Destiny

Earlier this spring, reports emerged that Amazon had shied away from expanding its online empire by opening a digital pharmacy. Those reports, it turns out, were premature.

Today, Jeff Bezos’s Amazon announced that it had struck a deal to buy PillPack, a pharmacy that provides pre-sorted packaging and home delivery of drugs, with plans to close by the end of the year. Insiders reportedly said Amazon will pay $1 billion for the company.

The purchase represents Amazon’s long-awaited and much-discussed move into the pharmacy, a space ripe for disruption, especially from the company that used the internet to turn commerce on its head. The decision sent waves through the stock market, with Walgreens, CVS, and Rite-Aid shedding $11 billion in value as of this morning, according to CNBC. Like the bookstores before them, these brick-and-mortar shops stand to lose the most from Amazon’s convenience-obsessed entrance into their market.

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“PillPack’s visionary team has a combination of deep pharmacy experience and a focus on technology,” Amazon CEO Worldwide Consumer Jeff Wilke said in a statement. “PillPack is meaningfully improving its customers’ lives, and we want to help them continue making it easy for people to save time, simplify their lives, and feel healthier. We’re excited to see what we can do together on behalf of customers over time.”

With PillPack’s processes and knowledge of the industry and Amazon’s vast network of resources, the deal could provoke a moment of genuine disruption in healthcare, which is already going through a digital metamorphosis.

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

The acquisition is expected to be completed in the second half of 2018, but it’s subject to regularly approvals and “customary closing conditions,” Amazon noted.

Over the past several years, Amazon has left a trail of breadcrumbs regarding how it might enter healthcare. It went out searching for a HIPAA compliance offer and made a number of moves that signaled it was most interested in pharmacy, though it also hit roadblocks.

Now, however, a question remains: Which else in healthcare is Amazon eyeing?

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