Amazon's attack on the pharmacy industry has begun

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

The delivery giant announced yesterday (June 28) that it had agreed to acquire PillPack, a USA online pharmacy business licensed to deliver pre-sorted medicine doses to patients across all 50 states.

"PillPack's visionary team has a combination of deep pharmacy experience and a focus on technology", said Jeff Wilke, Amazon CEO Worldwide Consumer.

The company, which has its primary pharmacy in Manchester, New Hampshire, ships to all states except Hawaii.

PillPack sells pre-sorted packets of prescriptions drugs, delivering them to customers in their homes.

Michael Rea, CEO of Rx Savings Solutions, said PillPack could transform the industry and that employers and health plans would benefit from the deal, which he called a "sign of the times".

"Money's no barrier for Amazon - they could acquire any of the big group wholesalers fairly easily, and that could cause significant indigestion for community pharmacies, as they'd have a supply chain ready-made and purchasing power second to none".

It's not clear yet just what Amazon plans for PillPack.

Additionally, Amazon's $13.7 billion purchase of the natural and organic supermarket chain Whole Foods in June previous year could provide the real estate Amazon may need to expand its pharmacy interests.

Last year, Amazon gained approval from a number of state pharmaceutical boards to become a wholesale distributor, according to media reports.

Amazon, Berkshire Hathaway and JPMorgan announced a joint venture in January, saying US health care costs were rising too fast and holding back economic growth. Big packaged food stocks also took a hit. It recently began selling medical devices and instruments, as well.

PillPack has raised $118 million in investor funding.

At the same time, Amazon shares rose 2.1 percent, adding more than $16 billion in market value, the story said.

Meanwhile, a spokesperson for the Pharmacy Guild said that "the Australian regulatory environment for prescription medicine supply may be an impediment to Amazon, but so be it because our regulatory environment is beneficial for patient safety and quality use of medicines".

And if Amazon's torrid stock performance in recent months is any indication, the company's shareholders love the deal activity, among other fundamental drivers.

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.

"The role of the physical pharmacies will continue to be very, very important in future".

GE left the Dow with the lowest share price and least amount of influence in the index, which is derived from an average of stock prices among constituent companies.

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