Amazon has announced plans to buy the American online pharmacy giant PillPack, sending shares in rival pharmacy retailers, like Boots, plummeting.
Though it was not revealed how much Amazon would pay for Pillpack, the young company is understood to have made $100 million last year, and the deal is due for completion late next year.
The news sent shockwaves through the pharmacy sector, with shares in rivals Walgreen Boots Alliance – which owns Boots here in the UK – diving 10.6 per cent yesterday.
“Together with Amazon, we are eager to continue working with partners across the healthcare industry to help people throughout the US who can benefit from a better pharmacy experience,” PillPack co-founder and chief executive TJ Parker said.
According to GlobalData’s managing director Neil Saunders, this represents a “warning shot” in what will soon become a “major battle” in the sector.
“In our view, this is only the first play in what will be an increasingly aggressive strategy by Amazon to develop a much more significant presence in the pharmacy market,” he said.
“This is incredibly bad news for traditional players, like Walgreens and CVS, who stand to lose the most from Amazon’s determination to grow its share.”