Nation & World

Amazon makes big foray into health care

PillPack deal would give it nationwide drug network

After months of speculation that it would get into the pharmacy business, online retailer Amazon is buying a pharmacy company. CREDIT: Bloomberg photo by Bess Adler
After months of speculation that it would get into the pharmacy business, online retailer Amazon is buying a pharmacy company. CREDIT: Bloomberg photo by Bess Adler

Amazon.com agreed to buy the online pharmacy start-up PillPack, jumping into the health care business with a deal that will give the retail giant an immediate nationwide drug network.

The move represents a formidable threat to pharmacy chains including Walgreens Boots Alliance, which earlier Thursday reported tepid U.S. same-store sales, and rival CVS Health Corp.

Terms of the deal weren’t disclosed. The transaction is expected to close in the second half of 2018, according to a statement from the companies.

The U.S. market for prescription medicine is huge. In 2016, U.S. consumers spent $328.6 billion on retail prescription drugs, according to the U.S. government.

CVS reported prescription sales of $59.5 billion last year, and Walgreens sold $57.8 billion worth of drugs in its fiscal 2017.

PillPack has mail-order pharmacy licenses in all 50 states, which could allow Amazon to expand quickly.

PillPack also has relationships with most major drug-benefit managers, including Express Scripts and CVS, and says it works with most Medicare Part D drug plans.

Those ties will give Amazon access to much of the prescription drug market in the United States.

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PillPack sells presorted packets of prescriptions drugs, delivering them to customers in their homes.

The closely held business has software that automates many routine pharmacy tasks, such as verifying when a refill is due, determining co-pays, and confirming insurance. That eliminates much of the manual work that pharmacists often are saddled with now.

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