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Amazon acquires PillPack online pharmacy, upending drug delivery business

Drug stores wars
Drug stores war heats up as Amazon prepares to sell prescription medications 02:04

Amazon announced Thursday it is expanding into the pharmaceutical space with plans to acquire online pharmacy PillPack.

PillPack, which is aimed at consumers who take multiple medications, presorts customers' prescriptions and helps manage refills and shipping. The service is available in 49 states, with its main pharmacy located in Manchester, New Hampshire. 

"PillPack's visionary team has a combination of deep pharmacy experience and a focus on technology," Jeff Wilke, CEO of Amazon Worldwide Consumer said in a statement. 

Amazon said the deal is expected to close in the second half of 2018.

The move sent pharmacy companies' shares tumbling, with CVS shares falling 9.2 percent and Walgreens Boots Alliance shares dropping 10.5 percent in early trading. Walgreens Boots, the Dow Jones industrial average's newest member, had earlier reported a strong earnings quarter.

Amazon's stock opened slightly higher, up .5 percent.

Amazon's foray into the pharmacy space had been expected. Late last year, the e-commerce giant received wholesale pharmacy licenses in at least 12 states, including Alabama, Arizona, Connecticut, Idaho, Louisiana,  Michigan, Nevada, New Hampshire, New Jersey, North Dakota, Oregon and Tennessee, according to the St. Louis Post-Dispatch. Some states require the permits to sell "professional use only" medical devices to medical and dental practices, rather than to patients. Those would include procedure trays, sutures, and syringes. 

In January, Amazon, Berkshire Hathaway and JPMorgan Chase announced they would be forming a new health care company for their employees aimed at tackling rising health care costs "free from profit-making incentives and constraints." Earlier this month, well-known author and surgeon Dr. Atul Gawande was named as CEO of the Boston-based venture.

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