Amazon is set to make its first major foray into the pharmacy business as Washington sets its sights on lowering drug prices.
The e-commerce giant announced on Thursday that it would acquire PillPack, a delivery company that provides pre-sorted medications and drug refills, for an undisclosed price.
“PillPack’s visionary team has a combination of deep pharmacy experience and a focus on technology,” Jeff Wilke, chief executive officer for Amazon’s consumer business, said in a statement. “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 move comes as the Trump administration and Congress are considering sweeping new measures that could affect both pharmaceutical companies and pharmacy benefit managers, who serve as middlemen between the drug manufacturers and the insurance companies.
Officials at the Department of Health and Human Services are threatening companies with more stringent regulations if the industry does not voluntarily lower the costs of its prescription medications, a promise President Trump made in May that has yet to come to fruition.
Drug prices also remain a key issue among the public as the November midterm elections near. According to a recent Kaiser Family Foundation poll, 49 percent of registered voters say a candidate’s support for legislation to lower drug costs is a “very important” factor when choosing a candidate.
Amazon has long been rumored to be interested in the pharmacy business and the announcement comes as the industry is in the midst of a major upheaval. CVS Health is awaiting federal approval for its proposed $69 billion merger with insurer Aetna. Rite Aid is also trying to convince shareholders to approve its merger with grocery store chain Albertsons.
The acquisition sent the stocks of pharmacy competitors tumbling in New York pre-market trading. CVS Health was down 7.92 percent to $64.50, Rite Aid was down 6.57 percent to $1.85 and Walgreens Boots Alliance was down 9.67 percent to $59.85. Amazon’s stock rose slightly to $1,667.88.
