Jeff Bezos is getting into the drug business. Simply not content with the complete domination of online retail, Amazon has continued to build and expand into other industries, including grocery, cloud services, and news media. Today, the company announced a proposal to buy PillPack, an online pharmacy.
Amazon's acquisition of PillPack is not a surprise to the pharmaceutical industry as the company has been toying with the idea of selling prescription drugs for months. However, Jeff Bezos and company were somewhat reluctant since it would require jumping through a tedious regulatory hoop, getting individual licenses to sell prescriptions in all 50 states. Buying PillPack essentially solves this as the online pharmacy already has them.
As reported by Yahoo! Finance, details of the potential Amazon-PillPack deal have not been disclosed. However, one estimate puts the value of the agreement at $1 billion. If the merger happens, it is expected to be completed by the end of the year.
"PillPack's visionary team has a combination of deep pharmacy experience and a focus on technology," explained Jeff Wilke, Amazon's chief executive of its consumer business. "We're excited to see what we can do together on behalf of customers over time."
News of the possible buyout of PillPack by the world's most popular online retailer made both the healthcare industry and investors shake in their boots. According to the New York Times, Walgreens and Rite Aid share prices plummeted 9 percent after the news broke. CVS stock also fell by nearly 7 percent. In contrast, Amazon shares jumped almost 3 percent.Started in 2013, PillPack specializes in selling packages of pills to customers that take multiple medications, typically people who have chronic conditions that need drugs for an extended period of time. As the U.S. population ages, industry experts expect tremendous growth for this segment of the healthcare market.
"PillPack has tens of thousands of customers across the country, will do over $100 million in revenue this year, and has launched PharmacyOS... designed specifically for customers with complex medication regimens," company spokeswoman Jacquelyn Miller wrote in an email to Yahoo!
The purchase of PillPack by Amazon is just another piece of the healthcare puzzle the online retailer is putting together. Earlier this year, Amazon announced plans to team with Berkshire Hathaway and JP Morgan Chase to create a healthcare company for the benefit of their employees across the U.S.
Amazon has tried the online pharmacy idea before. In 1999, Jeff Bezos bought 40 percent of Drugstore.com. The endeavor ultimately failed after logistic and regulatory problems remained unsolved.