Amazon set its sights on the pharmacy market Thursday with the acquisition of tech-focused retailer PillPack, sending shock waves through the sector over prospects of disruption by the United States online colossus.
PillPack delivers drugs in pre-sorted packaging to match the dosage.
Neil Saunders of the research firm GlobalData Retail, said the Amazon acquisition "is a warning shot" for the pharmacy sector.
Shares in pharmacy chains CVS Health and Walgreens Boots Alliance plunged more than 8% in early trade. "PillPack makes it simple for any customer to take the right medication at the right time, and feel healthier", its cofounder and CEO TJ Parker said in a press release.
Amazon did not say how much it was paying for PillPack.
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Amazon's ambitions to become an online pharmacy are finally coming to fruition.
"PillPack's visionary team has a combination of deep pharmacy experience and a focus on technology", noted Jeff Wilke, Amazon CEO for worldwide consumer. PillPack and Amazon said they expected to close the deal by the end of the year.
PillPack has raised more than $100 million in investor funding.
Founded out of Boston in 2013, PillPack invites customers to sign up online, and the company then dispatches "over-the-counter" and prescription medications in individual packs organized by date and time. "We're excited to see what we can do together on behalf of customers over time".
Seattle-based Amazon, which began two decades ago as an online bookseller, has mushroomed into one of the world's largest companies. Terms of the deal were not disclosed, but TechCrunch reported the deal was for "just under $1 billion". Also on Thursday, Amazon announced a new program that will partner with outside entrepreneurs to create a last-mile delivery system for Amazon packages, effectively creating an alternative to UPS or FedEx.