Walgreens Shares Sink After Amazon PillPack Deal

Amazon began two decades ago as an online bookseller but has mushroomed into one of the world's largest companies whose assets also include groceries and a hardware division

Amazon began two decades ago as an online bookseller but has mushroomed into one of the world's largest companies whose assets also include groceries and a hardware division

Amazon announced today it is buying PillPack, giving the online giant the ability to ship prescription drugs around the country.

Parker grew up behind the counter of his father's drug store in Concord, N.H., and has spoken of his exasperation seeing customers resort to spreadsheets to figure out how to schedule and sort their medications.

PillPack strives to provide the best possible customer experience for people in the United States who take multiple daily prescriptions.

"Together with Amazon, we are eager to continue working with partners across the healthcare industry to help people throughout the USA who can benefit from a better pharmacy experience", T.J. Parker, co-founder of PillPack, said in the press release.

Amazon is buying online pharmacy PillPack, and the main pharmacy stocks are getting whacked. PillPack had reportedly been in talks with Walmart - one of Amazon's big rivals - for an acquisition, and we confirmed that this was indeed the case.

Both Walgreens and CVS recently debuted same-day delivery programs to maintain an edge over the impending Amazocalypse, but it will be tough to stay competitive with Bezos' almost unlimited resources. McKesson, Cardinal Health and AmerisourceBergen shares were all down after the news.

"We know that we have to change the level of our services to the customers and we are working quite hard on that direction, but we are not anxious", Pessina said.

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Terms were not disclosed.

'At this juncture we are not anxious about Amazon's entrance into the prescription market, ' Cantor Fitzgerald analyst Steven Halper said in a note.

The purchase represents Amazon's long-awaited and much-discussed move into the pharmacy, a space ripe for disruption, especially from the company that used the internet to turn commerce on its head.

The news comes just a week after a joint venture of Amazon, Berkshire Hathaway Inc and JPMorgan Chase & Co named a CEO who will be tasked with significantly cutting healthcare costs for its estimated 1 million employees and dependents.

Amazon has officially charged into the health sector. The S&P 500 index of energy companies climbed nearly 13 per cent this quarter, far better than the rest of the market and its biggest gain in six and a half years.

It was the latest example of the fear the internet retailer can inspire when it enters a new industry.

PillPack was a 2014 finalist for Co.Design's Innovation By Design Awards.

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