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On Thursday, June 28, 2018, Amazon announced that they will be purchasing the online pharmacy PillPack. Though the terms of the deal weren’t released, it is expected to close within the second half of this year.
This is just the latest acquisition deal the health care industry has seen in the past year. However, since the deal’s announcement, it has had an impact across the market.
What Does This Deal Mean for Amazon?
While Amazon had the ability to sell over-the-counter drugs through their partnership with Perrigo and to distribute medical devices, they’ve been trying to get into the prescription market. With PillPack, an online pharmacy startup that earned more than $100 million in revenue last year, they’re now able to do so.
Jeff Wilke, Amazon CEO Worldwide Consumer, said in a statement that he hopes the partnership will “[make] it easier for people to save time, simplify their lives and feel healthier.”
What Does The PillPack Deal Mean for the Market?
Amazon has been trying to get into the pharmacy industry for quite some time, and other retailers have taken proactive measures, such as adding one- or two-day prescription delivery options and creating vertical mergers of their own.
In December 2017, CVS Health announced that it would be buying Aetna. The CVS-Aetna merger would enhance the brick-and-mortar pharmacy experience by expanding on-site retail clinics and simplifying prescriptions. In March 2018, Cigna Corp announced that it would be purchasing the pharmacy benefits manager Express Scripts.
In early 2018, CVS announced that they would be launching an Rx Savings Finder Tool, which was designed to increase drug cost transparency.
These proposed mergers and new offerings indicate that industry giants are taking measures to increase their efficiencies and combat rising health care costs. Amazon’s entry into the industry is predicted to only pressure them more.
What’s Next?
As previously mentioned, this deal is expected to be finalized by the second half of this year. Brokers, employers and health care consumers should continue to monitor the news to keep up with the latest developments.
Do your employees want access to online pharmacies? Contact us to find out how we can help improve your employee benefits plan!