Amazon.com Inc.’s deal to buy online pharmacy PillPack put a dent in the stock prices of major drug distributors and pharmacies.
Amazon announced plans Thursday morning to buy the Boston-based startup for an undisclosed amount. The Wall Street Journal put the price at $1 billion in cash, citing unnamed sources.
McKesson was down more than six percent to about $136 per share, while AmerisourceBergen Corp.fell more than 4 percent to about $86 per share.
Walgreens Boots Alliance dropped nearly 10 percent to less than $60 per share and CVS Health Corp.’s share price decreased more than 6 percent to about $65.75.
Want to publish your own articles on DistilINFO Publications?
Send us an email, we will get in touch with you.
West Monroe Partners Senior Director of Life Sciences Ed Francis expects this to be Amazon’s first incremental step into the prescription drug business, with PillPack’s delivery capability to be followed by expansion into larger parts of the industry such as in-store pharmacies.
“Distributors will likely feel the impact first, as Amazon’s mail-order prescriptions take volume away from them,” he said. “Pharmacies will also start to feel the effects because a big part of their business comes from customers buying a cookie or some other impulse buy in addition to the drug they came into the store to pick up.”
Amazon recently added medical supplies and equipment to its online offerings, but hasn’t secured government permits to sell prescription drugs. PillPack holds pharmacy licenses in all 50 states.
Amazon named Dr. Atul Gawande CEO of its budding health care venture with JPMorgan Chase and Berkshire Hathaway last week. That business will also be headquartered in Boston.
Amazon took a similar approach with groceries. It founded AmazonFresh delivery 11 years ago, later expanding into same-day grocery delivery through grocery partners and acquiring Whole Foods last year.
“Unless you’re a producer of product, I think you’re threatened,” Francis said. “If you make drugs or medical supplies and you’re not on board with Amazon yet, you probably should be.”
The deal is expected to close in the second half of 2018.
Date: July 9, 2018
Source: bizjournals
