The company picked up independent pharmacy PillPack for an undisclosed amount on Thursday, allowing it access to PillPack's pharmacy distribution system created to make getting prescriptions simpler for patients.
"PillPack's visionary team has a combination of deep pharmacy experience and a focus on technology", Jeff Wilke, Amazon's CEO of worldwide consumer, said in a release. Amazon's deal creates more uncertainty about the future of the current system for delivering health care, Edward Jones analyst John Boylan said in a research note.
Founded out of Boston in 2013, PillPack invites customers to sign up online, and the company then dispatches "over-the-counter" and prescription medications in individual packs organized by date and time.
After months of speculation that it would get into the pharmacy business, online retailer Amazon is buying a pharmacy company.
PillPack delivers drugs in pre-sorted packaging to match the dosage. In January, Amazon, Berkshire Hathaway and JPMorgan Chase announced plans to create an independent company that's "free from profit-making incentive" and geared toward providing innovative healthcare solutions to their us employees. Bloomberg reported that an unnamed source with knowledge of the matter said that Amazon will pay about $1 billion for PillPack. Drug wholesalers Mckesson Corp., Cardinal Health and AmerisourceBergen were also down.
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To do so, it holds pharmacy licenses in all 50 states, developed proprietary pharmaceutical software, and is an in-network pharmacy with most pharmacy benefit managers, including Medicare Part D plans-features that were likely eye-catchers for Amazon.
"In our view, this is only the first play in what will be an increasingly aggressive strategy by Amazon to develop a much more significant presence in the pharmacy market", he said.
Some analysts played down the immediate threat Amazon poses.
The three companies said they would use big-data analysis and other high-tech tools to improve care and cut waste. PillPack already raised over $120 million in funding, according to Crunchbase. It's raised more than $118 million from brand-name investors including Accel, Sherpa Capital and NY rapper Nas's Queensbridge Venture Partners.