Amazon to step up ‘attack’ on pharmacy industry

After months of speculation, Amazon is finally entering the US prescription-drugs market. Many analysts are asking – will Australia be next?

The online retail giant has announced it will acquire PillPack, an online pharmacy that seeks to simplify medication for people who take multiple drugs, by delivering packets with pre-sorted doses. PillPack is similar to Webster-pak in Australia.

Amazon will pay about $US1 billion ($1.35 billion) for the Boston-based company, according to media reports. The transaction is expected to close in the second half of 2018, according to a statement from the companies.

“I think this is a fundamental step for Amazon, to begin to attack the pharmacy industry,” said President of Pembroke Consulting Adam Fein, 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.”

The PillPack acquisition gives Amazon a foothold in the regulated-pharmacy business. More importantly, says Chief Executive of Rx Savings Solutions Michael Rea, PillPack has pharmacy licenses in all 50 US states and brings in-house expertise that could help Amazon move more quickly into a space that is full of regulatory obstacles.

“I think this move jump-starts efforts and clears some hurdles, and what it’s really going to do is fast-track any moves [Amazon] want to make to get licensed,” Rea said. “PillPack has got a good, fast-growing business, they’ve got infrastructure in place, and they’ve got the regulatory compliance piece in place … It brings speed.”