Online pharmacy deal expected to close during 2018.

SEATTLE and BOSTON — Amazon and PillPack today announced that they have entered into a definitive merger agreement under which Amazon will acquire PillPack. PillPack is a pharmacy said to be designed to provide the best possible customer experience in the U.S. for people who take multiple daily prescriptions. PillPack delivers medications in pre-sorted dose packaging, coordinates refills and renewals, and makes sure shipments are sent on time.

CVS Health Corp. and Walgreens Boots Alliance as well as other retail stocks were trading lower Thursday morning following the announcement of the deal, which marks a major move by Amazon into the pharmacy business. PillPack is already licensed to sell mail order prescriptions in 49 states. The company is also is an in-network pharmacy with all the major pharmacy benefit managers, including the following: CVS Caremark, Express Scripts, Optum Rx, Prime Therapeutics, Humana Pharmacy Solutions, Cigna, Aetna, MedImpact, EnvisionRx, and CastiaRX. As part of these relationships, PillPack is also in network with most major Medicare Part D plans.

“PillPack’s visionary team has a combination of deep pharmacy experience and a focus on technology,” said Jeff Wilke, Amazon chief executive officer worldwide consumer. “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 makes it simple for any customer to take the right medication at the right time, and feel healthier,” said T.J. Parker, co-founder and CEO of PillPack. “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.”

Sylvain Perrier, president and CEO at Mercatus, a leading provider in digital solutions for grocery market said the implications of this acquisition are far reaching.“Unsurprisingly, Amazon is taking its next big step towards becoming a huge player in the health care industry. The acquisition of PillPack puts Amazon in a position to become even more entrenched in peoples’ everyday lives and offer shoppers everything they need, straight to their doorstep. This move will also undoubtedly push the healthcare industry forward by encouraging adoption of delivered medication and opening shoppers up to a new, more convenient way of receiving healthcare. Amazon will surely use its ever-changing fulfillment options to enhance the PillPack experience for customers through safer, more precise delivery methods to fend off prescription drug mismanagement and abuse. We should also expect secure prescription lockers at Whole Foods locations so that customers can grab their groceries and prescriptions in a convenient manner.”

He added that this move and continued innovations will give Amazon yet another advantage over other retailers who don’t continue to innovate and deliver convenience to customers. “Retailers can learn from Amazon by understanding their consumer and giving them what they want when they want it. Retailers should take steps to learn more about their shoppers’ lifestyle requirements and link health status to product recommendations in the grocery market. It’s a long road before retailers are truly health consciousness, but Amazon’s acquisition is certainly a step in the right direction to meet consumers’ needs and should act as a wake-up call for retailers,” he concluded.

Completion of this transaction is subject to regulatory approvals and other customary closing conditions. The parties expect to close the transaction during the second half of 2018.