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Amazon to Acquire Online Pharmacy PillPack, Walgreens CEO Isn’t Threatened

PillPack brings in about $100 million in revenue each year, but has likely only captured about 0.5 percent of the US pharmacy market.

Amazon to Acquire Online Pharmacy PillPack, Walgreens CEO Isn’t Threatened

By: Sarah Hand, M.Sc.

Posted on: in News | Videos | Pharmaceutical News

After months of speculation over when and how Amazon would be entering the pharmacy space, the e-commerce giant has announced its plans to buy online pharmacy PillPack. The two haven’t disclosed the financial terms of the deal but have said they expect it to be completed in the latter half of this year.

According to a report from StatNews, retail powerhouse Walmart was recently in talks to buy PillPack for nearly $1 billion. According to George Hill, an RBC Capital Markets analyst, PillPack brings in about $100 million in revenue each year, but has likely only captured about 0.5 percent of the US pharmacy market. Yet, PillPack reports that 80 percent of their customers are happy with the service and would be likely to recommend the online pharmacy to family and friends.

“PillPack’s visionary team has a combination of deep pharmacy experience and a focus on technology,” says Jeff Wilke, Amazon CEO Worldwide Consumer. “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.”

PillPack is a medication delivery service which offers convenient extras consumers often can’t get at their local brick-and-mortar pharmacy. For patients taking more than one pill, the company sorts medications into individual packets printed with the time and day of the week those pharmaceuticals are to be taken.

The company reports that 40 million US adults take over five different drugs each day, making the size of their potential customer base substantial. They also say that half those patients don’t take their medications as prescribed which can lead to major health problems.

“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. “Together with Amazon, we are eager to continue working with partners across the healthcare industry to help people throughout the US who can benefit from a better pharmacy experience.

For his part, Stefano Pessina, CEO of US pharmacy chain Walgreens, isn’t expressing concern when it comes to the potential for competition from Amazon in the consumer drug supply market. “We are not particularly worried,” said Pessina in an earnings call on Thursday.

Amazon made waves in the pharmaceutical industry when it started acquiring wholesale pharmacy licenses in multiple states late last year. Many reasons why the company would be unlikely to get into the drug supply business – including its lack of cold chain – have been proposed, however Amazon’s experience in private label OTC drug sales means they’re no stranger to the pharmacy market.


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