Amazon gains foothold on healthcare market with acquisition of PillPack

Amazon has been testing the waters in the pharmaceuticals industry for a while, but with the acquisition of US online pharmacy company, PillPack, it makes its most aggressive move yet. But what does this mean for Europe?

By
Tonya
Stewart

Amazon has announced that it is buying mail-order pharmacy start-up, PillPack, in a deal reported to be worth around $1bn (€.86bn approx.), confirming suspicions that the e-commerce giant is looking to break into the healthcare market.

With the deal, Amazon will gain the ability to ship prescriptions nationwide and overnight throughout the US (PillPack currently pre-sorts medication and ships it to customers’ homes in 49 US states). It will also become a direct threat to the more than $400bn (€341bn approx.) pharmaceuticals business.

It will also, of course, get a glut of healthcare data and insight into people’s prescriptions, though in the highly regulated healthcare information industry where protecting user information is far more complex, it will be limited in what it can do with this data.

PillPack, which was founded in 2013, distributes pills in easy-to-use packages designed for consumers with chronic conditions and multiple prescriptions. Used in every US state apart from Hawaii, it liaises directly with a patient’s doctor to process repeat prescriptions. It also allows customers to chat with a pharmacist or update their settings through the PillPack app.

Jeff Wilke, Amazon’s CEO of worldwide consumer, said PillPack was “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”.

TJ Parker, co-founder and chief executive officer of PillPack, said: “Together with Amazon, we are eager to continue working with partners across the healthcare industry to help people throughout the United States who can benefit from a better pharmacy experience.”

The purchase of PillPack is not Amazon’s first foray into the healthcare market. In February this year, it was reported the firm was teaming up with Warren Buffett’s Berkshire Hathaway and US banking giant JP Morgan Chase to launch a healthcare business for their own employees.

Pharmaceutical spending is higher in the US than any other country - at $1,162  (€997) per capita - and with its acquisition of PillPack, Amazon gets access to some of this. But with two European countries, Switzerland (at $1,053/ €904 per capita) and Germany (at $766/ €658 per capita) also in the top five countries in terms of their pharmaceutical usage - with 10 other European countries following closely behind - is it just a matter of time before the retail behemoth gets its grasp on European healthcare markets?

Tonya Stewart

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