Amazon is absolutely serious about disrupting healthcare

After months of speculation around how Amazon will enter the healthcare market, the home delivery giant announced the acquisition of pharma startup PillPack, causing more traditional pharmacies’ stock prices to fall.  

Amazon acquired an online pharmacy that offers pre-sorted doses of medication causing a small turbulence on the market, but firmly making another step into the pharma.

PillPack is an online pharmacy that provides patients in the US with their prescription in simple to use, pre-packaged doses. The company’s is currently licensed to ship prescriptions in 49 states. The company has also developed its own operational system — PharmacyOS — which organises patient and pharmaceutical data.

Jeff Wilke, CEO of worldwide consumers at Amazon, said: worldwide “PillPack’s visionary team has a combination of deep pharmacy experience and a focus on technology.”

“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.”

Following the acquisition announcement, stock prices for conventional pharmacies like Rite Aid, Walgreens, and CVS fell drastically, losing $11 billion market value, while Amazon shares gained over 2%.

These significant changes in the market values might be one of the first signals of potentially huge disruption in the US healthcare market Amazon has been promising for a while.

The terms of the deal haven’t been disclosed yet, but reports that surfaced online suggested that the acquisition went for just under $1 billion. In the recent statement, the companies said they expect to close the deal in the second half of 2018.

This acquisition is not the first, but another firm step for Amazon into the healthcare market.

At the beginning of the year, Amazon, Berkshire Hathaway, and JPMorgan Chase formed an independent healthcare company to “rethink healthcare for their own employees”.

Just last week, the trio announced respected surgeon, Atul Gawande to head the still unnamed company.