Amazon buys prescription delivery startup PillPack

PillPack is pitched as a way to bring convenience to people who take multiple medications every day.
Written by Natalie Gagliordi, Contributor

Amazon said Thursday that it's buying PillPack, an online pharmacy startup that ships pre-packaged medications based on prescribed patient dosages.

PillPack is pitched as a way to bring convenience to people who take multiple medications every day. Beyond bundling daily prescriptions, PillPack's software also streamlines the refill and co-pay process and automates other pharmacy tasks.

The startup has raised upwards of $120 million in funding from backers including TechStars, Menlo Ventures, and Accel.

Amazon was vague in terms of what it plans to do with PillPack, other than supporting the startup's team as they "continue making it easy for people to save time, simplify their lives, and feel healthier," according to Amazon's worldwide consumer CEO Jeff Wilke.

Of course, Amazon is in the midst of developing a joint healthcare venture in partnership with the CEOs of Berkshire Hathaway and JP Morgan Chase.

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The trio of business icons -- Jeff Bezos, Warren Buffett and Jamie Dimon -- first announced plans for the joint venture in January as part of an effort to reduce healthcare costs for their US-based employees.

Details of the initiative remain slim, but the companies said the initial focus will be on building the backend technology that's needed to provide health coverage services to a large workforce. Over time, the goal is to incubate new healthcare models that are scalable to the healthcare market as a whole.

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PillPack fits nicely into Bezos' broader healthcare goals, but it's possible that the startup remains solely in Amazon's realm. The e-commerce giant is known for its pivots into new industries, and pharmaceuticals is a profitable bet. PillPack says it holds pharmacy licenses in all 50 states, meaning Amazon could become the de facto pharmacy delivery service for Prime members and beyond.

"This will disrupt the way consumers pick up their medications and has serious implications for brick and mortar retail pharmacies," said Forrester senior analyst AreielleTrzcinski.

Financial terms of the deal were not disclosed, but sources cited by TechCrunch peg the price at just under $1 billion. Apparently Walmart was also interested in buying PillPack and was outbid by Amazon.

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