Amazon’s march into healthcare took another big step on Thursday as the tech giant announced its intention to acquire PillPack.
Founded in 2013, Boston-based PillPack is an online pharmacy that ships pre-packaged doses of medication straight to customers’ doors. The company had raised $118 million and TechCrunch pegged the acquisition price at nearly $1 billion, which would make it one of Amazon’s largest acquisitions to date.
Walmart was in talks to acquire PillPack earlier this year for less than $1 billion, CNBC reports, and the company was last valued at $360 million.
The announcement comes one week after Amazon, JPMorgan Chase and Berkshire Hathaway revealed the CEO of their new healthcare tech company. Shares of Walgreens, Rite Aid, and CVS Health were down on Thursday morning.
“PillPack’s visionary team has a combination of deep pharmacy experience and a focus on technology,” Jeff Wilke, Amazon CEO Worldwide Consumer, said in a statement. “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.”
The acquisition follows months of rumors that Amazon was eyeing consumer healthcare services, particularly the pharmacy space. Its new joint healthcare venture aims to go even further and revolutionize the healthcare system, with help from innovative new technologies.
Acquiring PillPack marries the company’s aspirations to move into consumer-centric healthcare verticals and its strong focus on complex logistics and delivery systems. Also on Thursday, Amazon announced a new program that will partner with outside entrepreneurs to create a last-mile delivery system for Amazon packages, effectively creating an alternative to UPS or FedEx.
Someday soon, the workers in Amazon-branded shirts and vans could be delivering customers’ medication. And they won’t be alone: Drugstore giant CVS recently struck a deal with the United States Postal Service to deliver prescription drugs and other goods to customers homes. Startups like San Francisco-based Nimble Pharmacy, which recently expanded to Seattle, are also taking a swing at the space.
Here’s how PillPack works: Users receive a monthly roll of pre-sorted medications with labels that include photos and instructions. The service is aimed at people taking more than one prescription drug every day. It also handles refills and communicates directly with users’ insurance and doctors.
Its software platform, PharmacyOS, was built in-house and helps customers manage their pill intake with real-time notifications and an online dashboard. Customers can use the technology to contact pharmacists that can answer questions.
The company’s backers include Accel Partners, Atlas Venture, CRV, Founder Collective, Menlo Ventures, Sherpa Ventures and Techstars. The deal is expected to close later this year.