Amazon shakes up drugstore industry with acquisition of online pharmacy PillPack

The company said on Thursday morning it was buying online pharmacy PillPack in a deal that will instantly give Amazon a platform through which to sell pharmaceuticals.

Terms were not disclosed on the deal for PillPack, an online pharmacy which operates in all 50 USA states and offers pre-sorted dose packaging and home delivery.

USA stocks swung between gains and losses on Thursday, as Amazon's foray into drug retailing whipped the healthcare sector, while a rise in financial stocks for the first time in 14 days cushioned the markets.

Last year Amazon closed a deal to acquire the Whole Foods grocery chain and has begun offering discounts to consumers who are members of its Prime subscription service. Shares of Cardinal Health, AmerisourceBergen, McKesson, and Express Scripts all dropped more than 3% on the news.

Walgreens Boots Alliance, the newest Dow component, plunged almost 10%. But U.S. pharmacy same-store sales fell. In January, the company announced a collaboration with JPMorgan and Berkshire Hathaway meant to reduce healthcare costs for United States workers.

PillPack sorts prescription medications into packages based on when doses need to be taken.

The deal is expected to close in the second half of 2018. CVS Health, for example, has launched next-day prescription delivery services nationwide and same-day delivery in select cities, including New York, Boston, Miami, Philadelphia, San Francisco and the District.

The online pharmacy also coordinates refills and ships prescriptions to customers' homes. Amazon will retain the Manchester location, according to PillPack.

Some analysts played down the immediate threat Amazon poses.

These and other health care stocks rose a few months ago after reports that Amazon may not have been interested in selling prescription drugs.

The company's backers include Accel Partners, Atlas Venture, CRV, Founder Collective, Menlo Ventures, Sherpa Ventures and Techstars.

PillPack raised a total of roughly $118 million in private capital before its acquisition by Amazon.

The company had attracted interest from Walmart Inc, which was looking to buy it for under $1 billion, CNBC had reported in April. "I strongly believe that the role of the physical pharmacy will continue to be very, very important in the future".