Amazon buys PillPack, an online pharmacy that was rumored to be talking to Walmart

A week after appointing a CEO for its healthcare joint venture with Berkshire Hathaway and JPMorgan, Amazon today announced an acquisition that underscores how it also hopes to have a more direct — and more commercial — role in the world of healthcare in the coming years. The company has purchased PillPack, an online pharmacy the lets users buy medications in pre-made doses.

Terms of the deal have not been disclosed by Amazon, but the company had reportedly been in talks with Walmart — one of Amazon’s big rivals — for an acquisition at just under $1 billion. 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 valuation hike) how 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 might want or need.

“PillPack’s visionary team has a combination of deep pharmacy experience and a focus on technology,” says Jeff WilkeAmazon CEO of Worldwide Consumer, in a news release. “PillPack is 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. We’re excited to see what we can do together on behalf of customers over time.”

PillPack has a license to operate in all 50 states in the U.S. and has other accreeditations 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.

It looks like TJ Parker, co-founder and CEO of PillPack, will be staying on to run the business.

“PillPack makes it simple for any customer to take the right medication at the right time, and feel healthier,” he said in a statement. “Together with Amazon, we are eager to continue working with partners across the healthcare industry to help people throughout the U.S. who can benefit from a better pharmacy experience.”

PillPack had raised $123 million with investors including Accel, Charles River Ventures and Menlo Ventures.

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