Amazon’s Acquisition of PillPack

By: Autumn Field


PillPack is a Boston-based startup that began in 2013. The company sorts and ships prescription medications to its customers in a monthly supply of pre-portioned daily medicine packets. PillPack provides their services to 49 states and offers overnight shipping to clients. on track to bring in more than $100 million in revenue this year, the company was recently sold to Inc. for approximately $1 billion, giving the e-commerce heavy-weight an entrance into the $400 billion pharmacy industry.


Jeff Wilke, the head of the worldwide consumer division at Amazon stated, “PillPack is meaningfully improving its customers’ lives, and we want to help them continue making it easy for people to save time, simplify their lives, and feel healthier. We’re excited to see what we can do together on behalf of customers over time.”


TJ Parker, the CEO and co-founder of the purchased company, PillPack, also commented on the deal saying, “Together with Amazon, we are eager to continue working with partners across the healthcare industry to help people throughout the U.S. who can benefit from a better pharmacy experience.”


Using PillPack as a starting-point prevents Amazon from having to create its own infrastructure to join the pharmacy market. However, the new kid on the block may not be entirely welcome as Amazon’s entry triggered a decline in the stock value for well-known pharmacy providers like CVS Health Corp., Walgreens Boots Alliance Inc., and Rite Aid Corp.


Although this acquisition does provide Amazon entry into the pharmacy market, it does not mean that the transition will be easy. The health-care market can be a difficult sea to navigate, full of health plans, contracts, relationships, and drug benefit managers that all require specific attention. In order to prosper, Amazon will have to reach out and make the connections necessary to ensure that its clientele is well cared for.


As for the other pharmacy companies that appear to have been caught in the crossfire of the deal, some are adapting to the change. CVS has struck a deal with the United States Postal Service that enables them to deliver prescriptions right to their clients’ doors. A CVS spokesman told the that, “We believe that we are well-positioned in the market and ahead in this area. Keep in mind, that we have not seen a large shift of patients that are looking for their medications to be delivered versus coming to a retail pharmacy.”


Currently, it is unknown how this acquisition will impact the consumer financially, but those who wish to use the pharmacy service will have to provide some personal information. Pharmacies, including PillPack, must meet HIPAA (Health Insurance Portability and Accountability) requirements, but consumers should still read any and all fine print before signing anything to guard againstunknowingly giving consent to the sharing of their information. At this time, Amazon’s intended use for patient information is unclear.


Prescription drug prices may or may not be affected by the deal as well. Upon their acquisition of Whole Foods, Amazon cut the chains prices and the company has already begun a health care nonprofit to help lower health care costs. There have been no changes to PillPack’s prices, promised or otherwise as of this time, making it difficult to determine how the acquisition will impact consumers. Currently, PillPack works with insurance companies and other healthcare providers, but its customers still foot co-pay bills.


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