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Published: Fri, June 29, 2018
Medical | By Garry George

Amazon just put the entire pharmaceutical industry on notice

Amazon just put the entire pharmaceutical industry on notice

Shares of Walgreens and CVS Health Corp. dropped in pre-market trading today on news that Amazon.com Inc.is poised to acquire PillPack, an online pharmacy service that holds licenses in all 50 states.

Additionally, Amazon's $13.7 billion purchase of the natural and organic supermarket chain Whole Foods in June previous year could provide the real estate Amazon may need to expand its pharmacy interests.

Leading drugstore chains are already feeling the effects of Amazon's deal.

DAVID LANE/UNION LEADER FILECEO TJ Parker gives a tour of PillPack in Manchester in 2016. Walgreens Boots Alliance is down 8.76 percent as of writing and Rite Aid Corporation slipped 11.17 percent.

With Amazon's (amzn) firepower behind it, PillPack can upend how customers buy and receive their prescription medications.

"We want to help them continue making it easy for people to save time, simplify their lives, and feel healthier". McKesson, Cardinal Health and AmerisourceBergen shares were all down after the news. Bloomberg reported that an unnamed source with knowledge of the matter said that Amazon will pay about $1 billion for PillPack.

PillPack stands out from the crowd in both its ability to deliver to your door as well its organized and regimented packaging, often chronic medications will come in daily or weekly doses all separated out to eliminate confusion.

Amazon.com Inc. is buying its way into the heart of the USA health-care system, instantly shaking up a prescription-drug industry already in the midst of a broader transformation. The three companies said they would use big-data analysis and other high-tech tools to improve care and cut waste.

Amazon's acquisition of PillPack is sure to rankle the business-development team at Walmart, which was reportedly looking at buying the pharmacy startup in early April.

The company's backers include Accel Partners, Atlas Venture, CRV, Founder Collective, Menlo Ventures, Sherpa Ventures and Techstars.

PillPack raised a total of roughly $118 million in private capital before its acquisition by Amazon.

For now, Walgreens indicated that it was in no hurry to find a deal to respond to Amazon, despite the damage to its stock.

"It is a declaration of intent from Amazon", said Pessina.

The companies said the deal would have to clear regulatory hurdles before it is complete.

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