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Online retailing giant Amazon announced plans to purchase a delivery-focused pharmacy on Thursday, driving the shares in large US drugstore chains sharply lower.
The company said it has agreed to purchase PillPack, a pharmacy that focuses on customers that need to take multiple daily prescriptions.
“PillPack delivers medications in pre-sorted dose packaging, coordinates refills and renewals, and makes sure shipments are sent on time,” Amazon said.
The deal comes as Amazon, along with JPMorgan Chase and Berkshire have joined together to enter the healthcare industry with a not-for-profit healthcare company. When it was announced earlier this year, the trio of American heavyweight companies said they aimed to reduce bills for their employees and "potentially all Americans".
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Amazon did not say whether this purchase was related to its healthcare venture.
PillPack currently ships to 49 US states, according to its website. It is backed by several big-name investors, including Accel Partners and Menlo Ventures. Customers who order their medication through the company "receive a personalised roll of pre-sorted medications, along with a convenient dispenser and any other medications that cannot be placed into packets, like liquids and inhalers."
Drugstore shares sink
The news sent shares in America's biggest drug stores sinking shortly after the opening bell on Wall Street. Walgreens Boots Alliance dropped 10 per cent, while CVS Health declined 9.5 per cent. Express Scripts, a large pharmacy benefits manager, dropped 3.7 per cent.
Mail-order prescription deliveries represent a small proportion of the overall market but has been a focus given the ageing Baby Boomer population that is expected to require higher levels of medical care in coming years.
Amazon said it expects the deal to close in the second half of this year, pending regulatory approval. It did not disclose the terms. – Copyright The Financial Times Limited 2018
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