It’s Amazon, not Walmart, that’s buying online pharmacy PillPack. The companies announced the deal Thursday morning but didn’t disclose any financial terms. The acquisition is expected to close in the second half of 2018.
Back in April, Walmart was in serious talks to acquire PillPack. Those talks apparently broke down, and it’s no surprise that Amazon swooped in. Amazon (NASDAQ: AMZN) and Walmart (NYSE: WMT) have been competing fiercely in both e-commerce and healthcare.
The acquisition helps open the door for Amazon to sell prescription drugs, which would be a big development in healthcare. PillPack, based in Somerville, MA, and Manchester, NH, runs a service to ship pre-sorted prescriptions in individual time-stamped packs and helps manage customers’ refills by coordinating with doctors and insurance companies.
Reuters and other outlets reported that shares of drug distributors and drug retailers such as CVS Health (NYSE: CVS), Walgreens (NASDAQ: WBA), Rite Aid (NYSE: RAD), and Cardinal Health (NYSE: CAH) were down in premarket trading Thursday. By mid-morning, each of those companies’ stock prices were down more than 8 percent.
Five-year-old PillPack raised at least $118 million in venture investment from the likes of Accel, Accomplice, CRV, Founder Collective, Menlo Ventures, Sherpa Capital, and Techstars. The company said in November that it had tens of thousands of customers across the U.S. and expected to generate more than $100 million in revenue in 2017.
PillPack CEO and co-founder TJ Parker (pictured) said in a prepared statement Thursday: “Together with Amazon, we are eager to continue working with partners across the healthcare industry to help people throughout the U.S. who can benefit from a better pharmacy experience.”