Online retail giant Amazon is entering the pharmacy business after months of speculation that the company could disrupt how prescription drugs are sold the same way it upended bricks-and-mortar retail.
Amazon announced Thursday that it would acquire PillPack, an online pharmacy that seeks to simplify medication for people who take multiple drugs, by delivering packets with presorted doses. A person who takes five different medications each morning, for example, could receive a packet with all the pills in a single pouch, instead of having to manually sort the doses into pill boxes for each day.
"I think this is a fundamental step for Amazon, to begin to attack the pharmacy industry," said Adam Fein, president of Pembroke Consulting and an expert on the drug supply chain. "This is the beginning of the pharmacy industry shakeout. . . . I think everyone right now is scrambling to figure out what this means for their business model."
Stock prices for major pharmacies and other companies that help deliver drugs to consumers tumbled. CVS Health, Walgreens and Express Scripts Holding opened down on the news.
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"While Amazon's focus and interest in pharmacy to date has been somewhat cloudy, [Wall] Street will see this as a full-frontal attack," Eric Coldwell, an analyst at Baird, wrote in a note to investors, adding that companies in the prescription drug supply chain were being "crushed."
