Amazon Acquisition Big Push Into Pharma Market
The pharma market took notice when Amazon made headlines recently after acquiring online pharmacy PillPack for a reported $1 billion. While the acquisition isn’t huge considering Amazon’s size or the revenues earned by PillPack last year ($100 million), the stocks of pharmacy chains including Rite Aid, Walgreens Boots Alliance and CVS Health dropped 8% to 10% on the day the deal was announced. This news wiped out nearly $13 billion in market cap from companies in the pharmacy sector.
A similar phenomenon was observed when Amazon acquired Whole Foods last year, with shares of Kroger, Wal-Mart and Target dropping in the days following the announcement. This indicates the level of trust that shareholders have in Amazon’s abilities to disrupt established industries. While PillPack might not have an immediate disruptive impact on the retail drug store and pharmacy industry, it certainly opens the door to interesting long-term developments in the space.