Amazon is like the internet’s e-commerce octopus: it is always reaching its tentacles into new areas, and then quickly becoming a dangerous force in that market. We’ve seen it with groceries and its Whole Foods acquisition, with Amazon’s fashion-related endeavors, and now, its acquired a startup called PillPack to replace your local pharmacy.
PillPack is an online pharmacy that handles the organization, packing, and delivery of drugs so that the 40 million Americans who take more than five prescriptions per day can do so as prescribed. (According to its website, half of Americans don’t do that.)
The startup sorts your medication by dose into individual packets and then delivers them to you. With the service, you don’t need to wait in line at a local pharmacy to get prescriptions filled, and it also promises to automatically contact your doctor when it comes time to handle refills. It’s licensed to operate in 49 states.
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The deal hasn’t been finalized yet—it’s expected to close in the second half of 2018—and the exact terms of the acquisition are under wraps. However, it likely wasn’t a fire sale: PillPack was reportedly valued at $330 million in 2016 and made more than $100 million in revenue last year. The company was previously in talks with Walmart, which hoped to acquire the startup for under $1 billion.
Like its recently launched Prime Wardrobe service for trying on clothes at home before you buy, PillPack isn’t just about Amazon venturing into a new sales area. It’s about providing a useful service to consumers that goes above and beyond what you’d get at a typical drugstore or a typical online prescription drug marketplace. (Multiple retailers already offer home deliveries—it’s PillPack’s dosage sorting that’s its true value.) The acquisition has benefits for, PillPack, as well. With Amazon’s might, the startup will be able to reach a far broader audience with its services.
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