Founded in 2013, Boston-based PillPack is an online pharmacy that ships pre-packaged doses of medication straight to customers' doors. CVS a year ago had about $45.7 billion in revenue from its mail order pharmacy business, accounting for about 15 percent of its pharmacy claims.
"We already have the capabilities that PillPack is offering and we have scale in the business", a company representative toldCNBC. CVS is buying insurer Aetna for while Cigna, another insurer, is scooping up pharmacy benefits manager Express Scripts.
"We are not particularly anxious", Pessina said, but added that the company was not complacent either.
"The health care space and pharmaceutical space in particular are very complex, nuanced markets", Lekraj said. "We're excited to see what we can do together on behalf of customers over time", said Wilke. "The Street will view this Amazon move as the beginning of the threat, not the entirety of it".
"With Amazon + PillPack this eliminates the need to stand in line at the pharmacy which may help overcome past barriers, especially if that patient has issues with mobility or transportation", said Forrester Analyst Arielle Trzcinski.
He said PillPack could be kicked out of current PBM networks, "especially if Amazon has designs of significantly ramping its prescription volume". The two reached an agreement a month later. The online retail giant outbid rival Walmart Inc.to win PillPack, Bloomberg reported on Thursday. Amazon now sells over-the-counter drugs through a partnership with Perrigo It also has pharmacy licenses in a number of states, in addition to being fully licensed to distribute medical devices across the United States. Customers using the platform pay a monthly service fee, which is often covered by insurance companies including Medicare Part D.
If Amazon can carve a $15 billion chunk out of just three companies with a $1 billion deal, just think of the damage it could inflict once it starts throwing around more money.
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