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| Amazon deal shakes healthcare sector | |
| (35 minutes later) | |
| Amazon has said it is buying online pharmacy PillPack, sending shares in rival healthcare firms tumbling over fears of competition from the online retail giant. | Amazon has said it is buying online pharmacy PillPack, sending shares in rival healthcare firms tumbling over fears of competition from the online retail giant. |
| Shares in pharmacy chains CVS Health and Walgreens Boots Alliance plunged more than 8% in early trade. | Shares in pharmacy chains CVS Health and Walgreens Boots Alliance plunged more than 8% in early trade. |
| The announcement confirmed earlier speculation that Amazon was interested in expanding into healthcare. | The announcement confirmed earlier speculation that Amazon was interested in expanding into healthcare. |
| Amazon did not say how much it was paying for PillPack. | Amazon did not say how much it was paying for PillPack. |
| It expects to complete the deal in the second half of the year. | It expects to complete the deal in the second half of the year. |
| PillPack, which launched in 2014, is available in every US state except Hawaii. It has raised about $120m from investors, according to its website. | PillPack, which launched in 2014, is available in every US state except Hawaii. It has raised about $120m from investors, according to its website. |
| The company's services are aimed at people who take multiple medications, delivering drugs in pre-sorted dose packages. The firm also helps to co-ordinate refills and renewals. | The company's services are aimed at people who take multiple medications, delivering drugs in pre-sorted dose packages. The firm also helps to co-ordinate refills and renewals. |
| TJ Parker, PillPack's co-founder and chief executive, said: "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." | TJ Parker, PillPack's co-founder and chief executive, said: "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." |
| Amazon declined to answer questions about how PillPack would be incorporated into its business and whether there are plans for international expansion. | Amazon declined to answer questions about how PillPack would be incorporated into its business and whether there are plans for international expansion. |
| Last year, the firm sent shudders through healthcare stocks after it was reported that it had won approval from state regulators for drug distribution. | Last year, the firm sent shudders through healthcare stocks after it was reported that it had won approval from state regulators for drug distribution. |
| The online retail giant also announced a joint venture with JPMorgan Chase and Berkshire Hathaway aimed at lowering health costs for the companies' US employees. | The online retail giant also announced a joint venture with JPMorgan Chase and Berkshire Hathaway aimed at lowering health costs for the companies' US employees. |
| 'Warning shot' | 'Warning shot' |
| Amazon, which has become a retail behemoth since its start as an online bookseller in 1994, is known for its willingness to forego profit, while slashing prices to win customers. | Amazon, which has become a retail behemoth since its start as an online bookseller in 1994, is known for its willingness to forego profit, while slashing prices to win customers. |
| Its entry into drug distribution 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. | Its entry into drug distribution 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. |
| "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. | "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." | "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." |
| Those companies increasingly rely on medications to bring customers into their stores. They will also be forced to spend more to try to match Amazon's offerings, he said. | Those companies increasingly rely on medications to bring customers into their stores. They will also be forced to spend more to try to match Amazon's offerings, he said. |