Current Events > Amazon set to purchase PillPack, venturing into retail pharmacy

(+) Yeah! (+)

https://www.reuters.com/article/us-pillpack-m-a-amazon-com/amazon-to-buy-pillpack-in-potentially-disruptive-drug-retail-push-idUSKBN1JO1RU

Amazon.com Inc said on Thursday it would buy small online pharmacy PillPack, a move that will put the world's biggest online retailer in direct competition with drugstore chains, drug distributors and pharmacy benefit managers.

The deal's potential to disrupt major players across the drug supply chain nationwide prompted a sell-off in shares of possible rivals, while sending Amazon shares up 2.5 percent.

PillPack supplies pre-sorted prescription drugs and other services to people who take multiple medications, a growing market as the U.S. population ages and requires treatment for multiple complex, chronic conditions.

Amazon is vying for a share of what is a more than $450 billion total U.S. prescription drug market, according to research firm IQVIA. Although PillPack expects sales to exceed only about $100 million this year, Amazon's huge customer base and existing shipping infrastructure could allow the company to scale up quickly.

Amazon could also negotiate directly with pharmaceutical companies, giving them the ability to offer cheap generic drugs even to customers without health insurance, according to industry experts. But it will face deeply entrenched competition dominated by pharmacies run by CVS Health, Walgreen Boots Alliance and Walmart Inc, and pharmacy benefits provided by CVS, Express Scripts UnitedHealth Group.

"Amazon's acquisition of PillPack is a warning shot in what is about to become a major battle within the pharmacy space," said Neil Saunders, managing director of GlobalData Retail.

The value of the deal was not disclosed. Bloomberg reported it to be $1 billion, citing a person familiar with the matter.

Pharmacy chains and drug wholesalers lost about $14 billion in market value on Thursday, while Amazon gained about $5.5 billion.

Shares of CVS closed down 6.1 percent, while Walgreen fell 10 percent. Shares of drug wholesalers McKesson Corp, Cardinal Health and AmerisourceBergen all fell.

This is a pretty damn big deal. I know some chains have been shitting the bed afraid this day would come.

Itll be interesting to see what happens from here

Also tagging medical/future medical users Im aware of

@joestarrr @Coffeebeanz @LanHikari10 @Reis

Interested to know what yall think, especially lan
---

I for one welcome our new Amazon overlords

Amazon is good
---

Cool.
---

based
---

These companies freaking out are well within their right. Amazon has more than enough pull to shake shit up

And if they could somehow get generic lists/free generics similar to Publix tied in with prime memberships for uninsured patients needing maintenance meds?

Game over honestly. Pack it up.
---

This should introduce some serious competition into that space, which is a good thing for the consumer.

The big players in pharmaceuticals and health insurance were scared of Amazon getting into the industry in earnest because the competition could force some serious reductions in pricing in order for companies to stay relevant.

I wouldn't be opposed to Amazon rolling out drone delivery of medicine for a fraction of the cost of what other pharmaceuticals are offering.
---

Amazon already controls so much, but more competitive pricing on prescriptions can only be good for people. Hopefully this works out well.
---

DezDroppedFreak posted...

These companies freaking out are well within their right. Amazon has more than enough pull to shake shit up

And if they could somehow get generic lists/free genetics similar to Publix tied in with prime memberships for uninsured patients?

Game over honestly. Pack it up.

It's a race to the bottom that benefits the consumer. This is why capitalism is so great. Competition forces quality up and prices of goods/services down.
---

FLUFFYGERM posted...

This should introduce some serious competition into that space, which is a good thing for the consumer.

The big players in pharmaceuticals and health insurance were scared of Amazon getting into the industry in earnest because the competition could force some serious reductions in pricing in order for companies to stay relevant.

I wouldn't be opposed to Amazon rolling out drone delivery of medicine for a fraction of the cost of what other pharmaceuticals are offering.

Retail pharmacy pricing is by and large dominated by insurance.

Really this only comes down to cash pricing/if amazon can get in bed with private insurance companies for preferred status (which we all know they can)
---

I can't wait till Amazon buys a private security company
---

DezDroppedFreak posted...

FLUFFYGERM posted...

This should introduce some serious competition into that space, which is a good thing for the consumer.

The big players in pharmaceuticals and health insurance were scared of Amazon getting into the industry in earnest because the competition could force some serious reductions in pricing in order for companies to stay relevant.

I wouldn't be opposed to Amazon rolling out drone delivery of medicine for a fraction of the cost of what other pharmaceuticals are offering.

Retail pharmacy pricing is by and large dominated by insurance.

Really this only comes down to cash pricing/if amazon can get in bed with private insurance companies for preferred status (which we all know they can)

If Amazon can produce medicine on its own by acquiring key businesses, it can set the price to whatever it wants. And since it's such a huge entity, Amazon can eat the costs of R&D into new medication and still sell medicine for a fraction of the cost since they make tons of revenue elsewhere.
---

I think it could be a positive thing for many patients - being able to afford necessary medication, that is.

On the other hand, brick and mortar drugstores closing could not only negatively impact pharmacists (and pharmacy techs too), but also patients who are part of the geriatric population who are less likely to use online services.

Additionally, I'm concerned that the conversion from brick and mortar to delivering medications could possibly increase theft and cause an increase in crime, especially with the possibility of controlled substances being in peoples mailboxes.
---

FLUFFYGERM posted...

DezDroppedFreak posted...

These companies freaking out are well within their right. Amazon has more than enough pull to shake shit up

And if they could somehow get generic lists/free genetics similar to Publix tied in with prime memberships for uninsured patients?

Game over honestly. Pack it up.

It's a race to the bottom that benefits the consumer. This is why capitalism is so great. Competition forces quality up and prices of goods/services down.

Again, solely speaking on cash pricing. What relationships they can form with private insurance companies and federally funded plans as well as build on PillPacks reputation will be key for everything else. There will still always be a need for walk in pharmacy, especially for antibiotics and the like, but some might be willing to wait the two days for cheaper pricing.

Again, this is all assuming they tie prescription benefits into Prime or if theyll even be allowed to do that. Its a slippery slope when you start talking about kickbacks and such

Also yeah, if they can get into the actual manufacturing then lol gg its over
---

joestarrr posted...

I think it could be a positive thing for many patients - being able to afford necessary medication, that is.

On the other hand, brick and mortar drugstores closing could not only negatively impact pharmacists (and pharmacy techs too), but also patients who are part of the geriatric population who are less likely to use online services.

Additionally, I'm concerned that the conversion from brick and mortar to delivering medications could possibly increase theft and cause an increase in crime, especially with the possibility of controlled substances being in peoples mailboxes.

I feel like mail order is just their first step. PillPack was a relatively small player in the grand scheme of things. The points you mentioned alone are why brick and mortar pharmacies will ALWAYS be a necessity in some form. I dont think its out of the realm of possibility to say they will venture into that if this goes well. CVS for example does both brick and mortar and mail order
---

Soon there will only be 3 companies in the world. Amazon, Google, and Disney.
---

They wouldn't need to form relationships with insurance companies. That is why they're acquiring PillPack. They want to compete with the insurance companies, not partner with them.

This goes back to how Jeff Bezos and Warren Buffet wanted to team up to create a non-profit healthcare solution that could compete with the existing solutions.

http://money.cnn.com/2018/01/30/news/companies/amazon-berkshire-jpmorgan-health-insurance/index.html

Amazon is partnering with Buffett's Berkshire Hathaway and JPMorgan Chase, the nation's largest bank, to try to address one of the nation's thorniest and priciest problems -- soaring health care costs.

The three companies unveiled an as yet unnamed company to give their U.S. workers and families a better option on health insurance. The statement said the new company will be "free from profit-making incentives and constraints."

They've already got a CEO for this initiative.

https://www.cnbc.com/video/2018/06/07/warren-buffett-health-care-initiative-ceo.html

It'll be a thing of beauty to watch Bezos and Buffet flex their massive muscle in this industry, because they make so much money elsewhere that they could roll out a platform that loses money at first and not even notice it. In fact it may prove to be a massive investment into worker productivity which will net them more revenue in general as well-rested and healthy employees are more productive.
---

BlazinBlue88 posted...

Soon there will only be 3 companies in the world. Amazon, Google, and Disney.

"The cab driver industry will only ever be the top two or three companies!"

*gets massively crushed and disrupted by Uber*

"Only nation states will ever be able to travel into space!"

*gets massively crushed and disrupted by SpaceX and Blue Origin and smaller companies that are starting to form in anticipation of the impending space race*

Don't underestimate how disrupted the big players can become. No business is too big to fail or too big to be made redundant.
---

Can you imagine if amazon made private prescription insurance irrelevant.

Some meds can be thousands of dollars to purchase from wholesalers, which is why I mentioned relationships for the current climate. Its a long process to get to what youre talking about
---

DezDroppedFreak posted...

Can you imagine if amazon made private prescription insurance irrelevant.

not really, no

would be nice to see it though
---

DezDroppedFreak posted...

Can you imagine if amazon made private prescription insurance irrelevant.

Some meds can be thousands of dollars to purchase from wholesalers, which is why I mentioned relationships for the current climate. Its a long process to get to what youre talking about

We don't need to imagine, I think we'll see it happen in under a decade. You don't need to purchase anything from a wholesaler if you can just spin up your own production and supply chain. Amazon already has a monstrously effective supply chain that just gets better each year. If they acquire and develop their own pharmaceutical capabilities there's no reason why they can't mass-produce medicine and sell it for a fraction of what others are selling it for.

The tl;dr is that I'm probably going to purchase some Amazon stock even though I really should've gotten some a few years ago >_>
---

What if amazon was our single payer

What if amazon overthrows the government

Is amazon Skynet
---

Amazon doesn't control the US trade regulations on pharmaceuticals so nothing will change.
---

DezDroppedFreak posted...

Is amazon Skynet

M_Live posted...

Reis posted...

I for one welcome our new Amazon overlords

FLUFFYGERM posted...

DezDroppedFreak posted...

Can you imagine if amazon made private prescription insurance irrelevant.

Some meds can be thousands of dollars to purchase from wholesalers, which is why I mentioned relationships for the current climate. Its a long process to get to what youre talking about

We don't need to imagine, I think we'll see it happen in under a decade. You don't need to purchase anything from a wholesaler if you can just spin up your own production and supply chain. Amazon already has a monstrously effective supply chain that just gets better each year. If they acquire and develop their own pharmaceutical capabilities there's no reason why they can't mass-produce medicine and sell it for a fraction of what others are selling it for.

The tl;dr is that I'm probably going to purchase some Amazon stock even though I really should've gotten some a few years ago >_>

The only issue with that would be some common meds (some newer diabetes meds come to mind as well as FXA inhibitors) are still only really available from their respective name-brand manufacturers until their exclusivity patents run out. Not everything is available generic and cant just be manufactured, and that muddies the waters a bit for the time being. Ill be interested to see if they get into R&D
---

DezDroppedFreak posted...

What if amazon was our single payer

What if amazon overthrows the government

Is amazon Skynet

If Amazon's marginal costs of doing business ever approach 0, the government could acquire it and nationalize it. Because by that point we'd have succeeded in getting to a stage in society where full-scale automation has made the concepts of work and profit largely irrelevant.
---

P4wn4g3 posted...

Amazon doesn't control the US trade regulations on pharmaceuticals so nothing will change.

Right.

Im mostly speaking about the shakeups that will come from this and if they push the issue further
---

im glad i picked the blue chip growth plan for my 401b now.
---

DezDroppedFreak posted...

The only issue with that would be some common meds (some newer diabetes meds come to mind as well as FXA inhibitors) are still only really available from their respective name-brand manufacturers until their exclusivity patents run out. Not everything is available generic and cant just be manufactured, and that muddies the waters a bit for the time being. Ill be interested to see if they get into R&D

They'll definitely get into R&D at this point. Just like how Bezos eats the significant costs of doing R&D for Blue Origin.
---

DezDroppedFreak posted...

FLUFFYGERM posted...

DezDroppedFreak posted...

Can you imagine if amazon made private prescription insurance irrelevant.

Some meds can be thousands of dollars to purchase from wholesalers, which is why I mentioned relationships for the current climate. Its a long process to get to what youre talking about

We don't need to imagine, I think we'll see it happen in under a decade. You don't need to purchase anything from a wholesaler if you can just spin up your own production and supply chain. Amazon already has a monstrously effective supply chain that just gets better each year. If they acquire and develop their own pharmaceutical capabilities there's no reason why they can't mass-produce medicine and sell it for a fraction of what others are selling it for.

The tl;dr is that I'm probably going to purchase some Amazon stock even though I really should've gotten some a few years ago >_>

The only issue with that would be some common meds (some newer diabetes meds come to mind as well as FXA inhibitors) are still only really available from their respective name-brand manufacturers until their exclusivity patents run out. Not everything is available generic and cant just be manufactured, and that muddies the waters a bit for the time being. Ill be interested to see if they get into R&D

Yeah, thats one thing Im worried about. If they bring down the prices of all old medications, new stuff that developed is going to be even MORE expensive until the patents run out
---

I'm expecting to see a tweet from the Manchild in Chief attacking Bezos over this at some point.

While I'd love to see more competition and lower prices for drugs, I don't think it'll be as simple as just purchasing PillPack. It'll be much more complicated when you consider insurance and PBMs in the picture as well.

I also hope this won't be 100% mail order, because mail order negatively impacts accessibility in small town settings.
---

Mail order also can't give emergency 3 day supplies and that sort of thing.
---

Nas won
---

great, now they can know what meds we take.

this isnt happening anytime soon, there's still a SHIT ton of clearance and logistics amazon needs to build/catch up on regarding the established players before they're anywhere close to delivering pills. also, most people that regularly get meds get them 1 - 2 weeks in advance or they're available same day over the counter... come on now.

they're just shaking shit up for now.
---

for all the people talking about competition is good... yeah. but amazon isnt looking to compete. they will buy everyone out eventually.

Bout time I change my major.
---

joestarrr posted...

On the other hand, brick and mortar drugstores closing could not only negatively impact pharmacists (and pharmacy techs too), but also patients who are part of the geriatric population who are less likely to use online services.

Good. Let's hope this puts those money hungry pharmacy schools out of business too.

Pharmacy schools care about one thing and only one thing: money.
---

BlazinBlue88 posted...

Soon there will only be 3 companies in the world. Amazon, Google, and Disney.

Uh, Apple is bigger than both Amazon and Google
---

Rob Cesternino posted...

joestarrr posted...

On the other hand, brick and mortar drugstores closing could not only negatively impact pharmacists (and pharmacy techs too), but also patients who are part of the geriatric population who are less likely to use online services.

Good. Let's hope this puts those money hungry pharmacy schools out of business too.

Pharmacy schools care about one thing and only one thing: money.

Idk I would say mines pretty good about putting patients first but it is in the top 25 programs in the nation so
---