Just one week after picking a CEO to lead its bold joint healthcare venture, Amazon has announced it’s acquiring an online pharmacy business called PillPack.
The small New Hampshire-based startup ships pre-packaged meds based on prescribed patient dosages, pitched as a convenience to those who take multiple drugs per day. The startup has raised north of $120 million from backers including TechStars and Menlo Ventures, and was valued at $361 million back in 2016.
Although financial details of the deal weren’t shared, PillPack was reportedly in talks with Walmart just months ago for an acquisition price of $1 billion — much higher than their last reported valuation.
The e-commerce giant was rather vague on what it plans to do with PillPack. We all know, however, that the company is tackling the massive goal of fixing the broken US healthcare system and lowering the cost of care. Amazon announced back in January that it was teaming up with Berkshire Hathaway and JPMorgan to disrupt the healthcare industry with a joint venture, and just appointed Atul Gawande as its new CEO.
Details of the initiative remain slim, but the companies said the first plan of action will be building backend technology needed to provide health coverage services to a large workforce.
The three business headliners have attracted plenty of attention with their alliance on taming healthcare costs, and a lot of skepticism about what they plan to do as well as what they can accomplish. That skepticism was heightened by a Wall Street Journal piece outlining Jamie Dimon’s rapid assurances to his big healthcare clients that he wasn’t setting up a rival organization, likening the venture to a group purchasing organization.
It appears that PillPack fits nicely into Jeff Bezos’ healthcare goals, but it’s possible the startup will remain solely in Amazon’s realm. PillPack holds pharmacy licenses in all 50 states, meaning Amazon could become the de facto pharmacy delivery service.
“PillPack’s visionary team has a combination of deep pharmacy experience and a focus on technology,” said Jeff Wilke, Amazon’s Worldwide Consumer CEO, in a statement. “PillPack is meaningfully improving its customers’ lives, and we want to help them continue making it easy for people to save time, simplify their lives, and feel healthier. We’re excited to see what we can do together on behalf of customers over time.”
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