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Amazon announces acquisition of online pharmacy

admin June 30, 2018 143 No Comments

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DT Daily: Amazon announces acquisition of online pharmacy

There have been plenty of rumblings that suggest e-commerce behemoth Amazon has major ambitions in the healthcare space. We have now received crystal clear confirmation that is in fact the case. Amazon has acquired an online pharmacy, and the deal is making serious waves throughout the pharmaceutical industry.

The tech titan has agreed to buy Pillpack, an online pharmacy that packages, organizes, and delivers presorted doses of medications to customers in 49 states. Pillpack CEO TJ Parker previously noted that his startup was on track to do $100 million in revenue for 2017.

The deal is worth a reported $1 billion, and it finally puts to rest rumors about Amazon’s desire to enter the space full force. Investors and analysts have long suspected that the company was eyeing up the pharmaceutical industry as another potential conquest, and the acquisition proves that it will have plenty to say about the continuing evolution of our nation’s healthcare.

In a statement, Jeff Wilke, Amazon CEO Worldwide Consumer, shared some insight into why the deal was sealed with Pillpack.

“PillPack’s visionary team has a combination of deep pharmacy experience and a focus on technology. 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,” he said. “We’re excited to see what we can do together on behalf of customers over time.”

Analysts quickly weighed in with some insight on what the deal means for the industry. RBC Capital Markets analyst George Hill is among those who believes a chain reaction effect isn’t out of the question.

“We suspect Amazon’s official entry into the space will now place a cap on drug supply chain multiples regardless of whether or not Amazon is able to scale the PillPack business,” he shared in a note to clients.

Lisa Bielamowicz, president of consultancy Gist Healthcare, also takes it as a clear sign that disruption is on the way. “This provides an avenue for Amazon to disrupt major pharmacy chains the way that they’ve disrupted booksellers, pet supplies, clothing and other big-box retailers,” she said.

Amazon has been on a major buying spree in recent times, and there doesn’t appear to be any industry that’s off limits at the moment. While the principles of capitalism suggest the company can keep gobbling up assets in a bid to grow even larger, there simply has to come a point in time where it becomes eyebrow raising.

Do we really want one single company to have so much influence over pricing and competition in so many different industries?

Read more: CNBC, Bloomberg

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