Rumors of an Amazon Pharmacy have been flying for the better part of a year that the big tech giant was preparing to disrupt the pharmaceutical industry, but until the $1 billion offer for PillPack was made official, it seemed to all be a lot of panic for nothing.
During that period, Cigna struck a deal to buy Express Scripts, Amerisource-Bergen opened talks with Walgreens and CVS offered $66 billion for insurer Aetna Inc. Walmart’s Amazon-preparedness tactics ended up butting the two companies against one another for PillPack.
Amazon will be positioned to be direct competition for all of these companies. Even though representatives insisted that there was no threat and that they weren’t worried about what the online retail giant will do with its new prize, investors are watching with great interest.
eCommerce Takes Another Step Toward Real Life
Amazon’s purchase of Whole Foods last year was perhaps one of the highest profile acquisitions it has made to date.
The method that Amazon has brought Whole Foods into its brand family is largely expected to be how it will handle PillPack. Instead of jumping in and rebranding everything, Amazon will employ its expertise on the back end and allow the PillPack team to lead on the customer-facing end.
Although PillPack has some very specific competencies, there are a lot of ways the company could become more of a player on the pharmacy scene. For example, although they only package meds and send them out to customers currently, Amazon might add a PillPack pharmacy to every Whole Foods store, suddenly turning a primarily mail order pharmacy into a full-service Amazon pharmacy.
Amazon and the Pharmaceutical Business
Amazon’s interest in the health care sector has been obvious since 1999, when it purchased a 40 percent share in Drugstore.com, which was later acquired by Walgreens.
According to the Wall Street Journal, this decision to jump into the pharmacy business has been debated for years. Recently, Amazon has gotten involved in selling hospital supplies and even formed a nonprofit aimed at addressing the high costs of healthcare.
Many of Amazon’s recent bets have been real winners, especially those that have the years of thought put into them that it would seem have been involved in the PillPack purchase.
Will Amazon become one of the world’s biggest pharmaceutical distributors? Only time will tell.