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Amazon Buys PillPack, Entering Pharmaceutical Space

Amazon Buys PillPack, Entering Pharmaceutical Space

Amazon has entered into a definitive agreement to acquire PillPack, an online pharmacy startup, for an undisclosed amount. The deal is the latest in a series of moves by major retailers, including Walmart and CVS, seeking their niche in the health care industry.

PillPack makes monthly deliveries of medications in time-stamped, pre-sorted dose packaging for the convenience of people who manage multiple medications. Customers also receive a dispenser along with any other medications that cannot be placed into packets, such as liquids and inhalers. Shipments include a medication label with a picture of each pill and notes on how it should be taken.

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“PillPack makes it simple for any customer to take the right medication at the right time, and feel healthier,” said TJ Parker, Co-Founder and CEO of PillPack in a statement. “Together with Amazon, we are eager to continue working with partners across the health care industry to help people throughout the U.S. who can benefit from a better pharmacy experience.”

Completion of the transaction is subject to regulatory approval and other customary closing conditions, and is expected to take place in the second half of 2018. The deal has already had a significant impact: Walgreens, CVS Health and Rite-Aid lost a combined $12 billion in value in the hours following the news, according to CNBC.

Walmart was a potential rival for PillPack; in April the retailer was engaged in talks to acquire the online pharmacy for “under $1 billion.” Discussions between the two companies had been ongoing for months.

Even though it has lost PillPack, Walmart is making other inroads in the medical industry through preliminary talks to acquire health insurance company Humana. Purchasing an insurance provider could be a big boost for Walmart, which houses pharmacies at most of its U.S. stores and in many of its Sam’s Club locations.

The move wouldn’t be without precedent: CVS Health acquired Aetna for $69 billion in December 2017. That deal offers benefits to both parts of the combined organization: Aetna gets more information on patients through access to data from CVS clinics and retail counters.

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