Amazon to buy PillPack in drug retailing push

PillPack prepackages and mails consumers pills.									Pat Greenhouse  The Boston Globe

Amazon has announced plans to acquire PillPack, an online pharmacy that sorts patients' medications into personalized packets that are delivered directly to their door.

In an interview with WBUR earlier this year, TJ Parker, one of PillPack's co-founders, said retail pharmacies haven't caught up with the reality of people who take multiple medications, meaning patients do a lot of work themselves. Its pharmacy is based in Manchester, N.H., and its business operations are located in Somerville, Mass.

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

Amazon said the deal is expected to close in the second half of 2018.

"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", PillPack co-founder and CEO TJ Parker said in a statement.

PillPack CEO T.J. Parker explains how his online pharmacy delivery service is competing with CVS. The e-commerce giant previously bought home security tech startup Ring for a reported $1.2 billion last February.

Amazon, Berkshire Hathaway and JPMorgan announced a joint venture in January, saying USA healthcare costs were rising too fast and holding back economic growth.

The move comes amid speculation that Amazon was planning to get into the pharmacy or drug-distribution business.

The three companies said they would use big-data analysis and other high-tech tools to improve care and cut waste.

The move represents a formidable threat to pharmacy chains including Walgreens Boots Alliance Inc., which earlier Wednesday reported tepid US same-store sales, and rival CVS Health Corp.

PillPack fits nicely into Bezos' broader healthcare goals, but it's possible that the startup remains exclusively in Amazon's realm.

Shares of drug wholesalers McKesson Corp, Cardinal Health and AmerisourceBergen also fell sharply.

"When Amazon sneezes, everybody else catches a cold", said Joseph Feldman, an analyst with Telsey Advisory.

"This is incredibly bad news for traditional players, like Walgreens and CVS, who stand to lose the most from Amazon's determination to grow its share", Saunders said. "And I think that that's more likely than not what you're going to see today"'. The company raised more than $118 million from brand-name investors including Accel, Sherpa Capital and NY rapper Nas's Queensbridge Venture Partners.

He said Walgreens knew that PillPack was for sale as "it had been for sale for a while", but that the retailer wouldn't do deals based on emotions or make moves that could destroy value. PillPack already raised over $120 million in funding, according to Crunchbase.

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