Amazon acquiring online pharmacy PillPack, sending drug retailer shares down

Above PillPack

Above PillPack

Amazon's ambitions to become an online pharmacy are finally coming to fruition.

The company said on Thursday morning it was buying online pharmacy PillPack in a deal that will instantly give Amazon a platform through which to sell pharmaceuticals.

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.

Founded out of Boston in 2013, PillPack invites customers to sign up online, and the company then dispatches "over-the-counter" and prescription medications in individual packs organized by date and time.

Drug retailers CVS Health and Walgreens Boots Alliance plunged 7 percent each in premarket trading.

Parker grew up behind the counter of his father's drug store in Concord, N.H., and has spoken of his exasperation seeing customers resort to spreadsheets to figure out how to schedule and sort their medications. This system is particularly convenient for people who require ongoing repeat prescriptions, as PillPack arranges the refills and renewals on behalf of the patient. PillPack already raised over $120 million in funding, according to Crunchbase.

"Manchester is proud to be home to innovative companies like PillPack that are not only driving our city's economic growth, but improving people's lives".

As it has grown, the company has found itself entangled with some of the traditional powers in the business. Startups like San Francisco-based Nimble Pharmacy, which recently expanded to Seattle, are also taking a swing at the space.

The move comes amid speculation that Amazon was planning to get into the pharmacy or drug-distribution business. In February, the grocery chain Albertsons Cos. said it would buy Rite Aid in an effort to hold off Amazon.

The deal - for which terms were not immediately disclosed - marks Amazon's latest push into the healthcare industry. And CVS is acquiring insurer Aetna in a bid to strengthen its business managing pharmacy benefits in the face of new competition.

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