Amazon’s Acquisition of PillPack

by Parks Associates | Aug. 27, 2018

Blog written by Alexa Saldana, Research Intern at Parks Associates

The health sector has captured the attention of tech giants and companies hoping to improve health-related experiences and offerings. One such giant, Amazon, announced the acquisition of PillPack in an effort to have a more direct role healthcare and pharmaceuticals.  Amazon believes will become a key player in its shift to take on digital healthcare. PillPack is of particular interest to Amazon due to its distinctive e-commerce business model. Amazon chief financial officer Brian Olsavsky notes  that “…we’re looking for well-run companies with highly differentiated customer experience…we think PillPack has got all those traits…”  PillPack has designed its services to be convenient for end users to refill prescriptions, order pre-sorted packaged pills, and arrange home delivery of medications. In addition, PillPack offers a 24/7 pharmacy consultation online and over the phone. Customers can monitor their refills, co-pays, and upcoming shipments through an online portal.

About forty million Americans adults take more than five medications daily, to treat a variety of conditions. Parks Associates’ 360 View: Health and Independent Living finds nearly 60% of heads of household in U.S. broadband households have a chronic condition. PillPack’s services include medication management to complement online ordering/refills and overnight shipping. Pharmacists at PillPack work directly with physicians, and for consumers with multiple medications, pharmacists engage in proactive consultation to ensure that drug interaction is safe. Customers can make changes through the app or over the phone, and the PillPack app allows customers to chat directly with pharmacists, check bills, and track shipments.

PillPack also has a caretaker feature where authorized users can stay connected to their loved one’s health and medications and receive updates on refills, shipments, and medication details. The caregiver feature on the app, designed to give people peace of mind about their loved ones, is one example of the personalized e-commerce business model PillPack has developed, which made it a particularly attractive company to Amazon.

The acquisition of PillPack is part of a multiyear process and strategy by Amazon developed for the prescription drug market and for healthcare overall. Amazon partnered with Berkshire Hathaway and JPMorgan Chase early in 2018 to improve healthcare for employees, and Amazon’s Jeff Bezos has promoted his firm’s entry into the medication space as a way to help drive down prices. The acquisition of PillPack is a key part of that vision, but it also ensures Amazon continues to expand its services and maintains its market position where consumers can buy “anything.”

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