Culture 3 mins read

With Grocery Delivery in the bag, Amazon Buys PillPack Delivery

You might have used the online pharmacy PillPack as an alternative to Walgreens or CVS. But now, you'll be using yet another Amazon service. The near $1-billion USD acquisition has investors in brick and mortar pharmacies totally spooked.

It's probably going to all be delivered by drones, but whatever. We'll keep it human for now. | Dmytro Zinkevych | Shutterstock.com

It's probably going to all be delivered by drones, but whatever. We'll keep it human for now. | Dmytro Zinkevych | Shutterstock.com

Amazon acquired Whole Foods back in August of 2017. Recently, the company rolled out Whole-Foods grocery delivery to select locations. Now, Bezos’s e-Commerce megaforce takes aim at pharmacies with its acquisition of PillPack.

You can utilize Postmates, Instacart, and other services for grocery delivery in many cities. However, residents of Chicago, Indianapolis, Houston, San Antonio, and Minneapolis can all now order Whole Foods groceries with Amazon delivery.

The e-Commerce giant seeks to continue its delivery disruption trend with PillPack delivery.

What does this mean for companies like CVS (whose stock is already declining)?

A “Drive-Thru Pharmacy” sign outside of a CVS Dallas, Texas, U.S. | Ben Torres/Bloomberg via Getty Images

Brick and Mortar Pharmacies on Shakey Ground

Many Americans, like me, get their prescription medications from drive-through pharmacies like CVS and Walgreens. Surely, Bezos knows how much we spend on prescription drugs $360 billion so far in 2018 in the U.S. It’s no surprise that this lucrative market is now in Amazon’s sights.

Beyond local pharmacies, you can get your prescriptions filled at many chains or franchised companies. Walgreens and CVS are two of the common companies, along with Target — powered by CVS.

Due to ever-changing insurance policies, some still looked for alternative ways to get their prescriptions. Naturally, businesses developed online pharmacies to fill this void.

Only until today, PillPack secured its positions as one of the leading online pharmacies.

Whether or not events such as CVS purchasing insurance network Aetna played into the popularity of online pharmacies, brick and mortar prescription fillers have much more to worry about now.

Jeff Bezos | AP Photo/Ted S. Warren via Quartz

Amazon Purchases PillPack, Stocks go Wild

Announced Thursday, June 28, 2018, Amazon finally made good on its desire to expand into the pharmacy business.

Amazon acquired PillPack, the online pharmacy, for around $1-billion USD according to TechCrunch. It seems like a good deal for both sides, as PillPack’s most recent valuation was around $361-million USD from PitchBook, and Amazon can immediately improve upon the company’s delivery infrastructure.

As a result of the acquisition, CVS and Walgreens’ stock prices respectively plummeted. To be specific, Walgreens stock lost 9.46% in pre-market trading and CVS went down 8.35%.

This bodes ill for Walgreens which was only just added to the Dow after General Electric’s removal.

To add further insult to injury, Walgreens still hasn’t quite shaken its disastrous association with Theranos. This failed blood test company sparks controversy even during its ongoing demise.

Perhaps Amazon will start to bundle grocery and pharmacy deliveries very soon.

Does Amazon’s move into e-pharmacy spell doom for brick and mortar pharmacies?

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Juliet Childers

Content Specialist and EDGY OG with a (mostly) healthy obsession with video games. She covers Industry buzz including VR/AR, content marketing, cybersecurity, AI, and many more.

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