Amazon Enters Pharmacy Biz, Sending Competitors’ Stock Tumbling

by | Jul 2, 2018 | NEWS

Amazon issued a press release June 28 stating that they had signed an agreement to acquire PillPack – an online pharmacy that offers pre-sorted doses of medications, home delivery, and a commitment to customer service.

Amazon has been teasing the idea of getting into the pharmacy distribution arena for some time now; this acquisition will give them the resources to make it happen. PillPack has pharmacy licenses in forty-nine states (they do not ship to Hawaii) as well as experience in the industry Amazon sorely needs to be successful.

PillPack’s products come in individual dose packets, meaning if you take five pills at breakfast, one at lunch and two at bedtime, you will receive 90 packages – 30 pre-filled with your morning medications, 30 with your lunch dose, and 30 with your bedtime prescriptions – delivered straight to your door with Amazon’s efficiency and timeliness.

Jeff Wilke, Amazon CEO Worldwide Consumer, said in the release, “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.”
The merger is expected to close in the second half of 2018 but is still subject to regulatory approval.

Stock prices for brick-and-mortar pharmacies, like Walgreens (NASDAQ: WBA) and CVS (NYSE: CVS) – as well as other prescription delivery systems, like Express Scripts (NASDAQ: ESRX) – plummeted at the news as investors fear Amazon will do to the retail pharmacy market what it did to retail.

Walgreens opened 6 points lower Thursday and dropped another point by close. CVS opened 6 points lower than its previous close as well but managed to gain back a point by close on Thursday. Express Scripts was down 2 points at open and regained one by close.

If the merger is approved, we may see pharmacies across America closing their doors like so many department stores before them.

But with the drive toward convenience and expediency, consumers no longer want to drive to the store and stand in line. Regardless of your feelings on the matter, online retail is the way of the future, and Amazon seems to be at the front of the pack.