Amazon's purchase of an online chemist that opens an immediate nationwide drug network in the USA has shaved billions off the value of three major pharmacy chains.
When the Jeff Bezos-led juggernaut announced it would buy PillPack, an online pharmacy, Walgreens shares dropped immediately. News of the acquisition is also a bitter pill to swallow for Walmart, which was said to be looking into buying PillPack for under $1 billion earlier this year, according to CNBC.
Walgreens scrapped its deal to buy Rite Aid outright previous year after failing to win antitrust approval, and said it would instead buy some of the smaller rival's USA stores.
The value of the deal was not disclosed. The service is available in 49 states, with its main pharmacy located in Manchester, New Hampshire. "We're excited to see what we can do together on behalf of customers over time".
Shares in pharmacy chains CVS Health and Walgreens Boots Alliance plunged more than 8% in early trade. "PillPack is meaningfully improving its customers' lives, and we want to help them continue making it easy for people to save time, simplify their lives, and feel healthier".
Echoing that sentiment, Morningstar senior analyst Vishnu Lekraj called the stock's tumble after the Amazon news a "huge overreaction", in an interview after the call.More news: Erdogan declared winner of Turkey presidential polls
The online retail giant also announced a joint venture with JPMorgan Chase and Berkshire Hathaway aimed at lowering health costs for the companies' USA employees.
Here's how PillPack works: Users receive a monthly roll of pre-sorted medications with labels that include photos and instructions. The company then mails the medications to patients and coordinates refills and renewals.
At the time, Parker argued that the company was working to protect its monopoly on home-delivered prescriptions, which Express Scripts disputed.
PillPack has raised more than $100 million in investor funding.
Someday soon, the workers in Amazon-branded shirts and vans could be delivering customers' medication.