Amazon Buys PillPack, an Online Pharmacy, for Just Under $1B
According to PitchBook, PillPack was last valued at $361 million after a round of funding in 2016.This deal is expected to close in the second half of 2018. The move (and that reported valuation hike) signal how heated the e-health market is becoming, and also how Amazon views it as a key frontier in its bid to be the go-to place for anything a consumer (or medical organization) might want or need in the area of healthcare. The might of Amazon in commerce plays a massive role in how the market is poised to develop: it buying the company is not only a signal of how PillPack will likely get scaled out (not least through Amazon’s healthcare JV) but also because of how other pharmacy companies will have to respond.
So far, the market is punishing the rest for not already being where Amazon appears to be going. PillPack has a license to operate in all 50 states in the U.S. and has other accreditations such as URAC AND VIPPS, but it doesn’t seem to be operational in international markets. Its PharmacyOS — the system it has built that forms the basis of the company — is a platform that helps manage patient data and figure out how to balance meds together in safe doses for its customers.
The challenge that the company is addressing is very real: The US is a huge consumer of medicines, and some of that has tipped into a large epidemic of abuse. While there are a lot of things that will have to happen to tackle that in the long and short term, at least helping to provide controlled doses of what patients are being prescribed is one aspect of how to tackle the problem.