Amazon just announced their $1 billion acquisition of PillPack, an online pharmacy drug dispenser. A company who set out to sell books now touch every part of our lives: from fashion, to food, to healthcare.
Cleanly designed, easy to understand, simple. It’s an acquisition that makes sense. Amazon has spent the last 20 years perfecting the direct to customer model, refining it until you can order something and have it within an hour.
PillPack proves a strategic and smart addition to the Amazon family. They’ve done the leg work; with pharmaceutical licenses in all 50 states already, and the infrastructure to run. Pharmaceuticals are a tough nut to crack. Endless legislation and regulation, it would be a long slog to get into organically. But the reward is worth it – the drug industry is worth $1105 Billion.
The financial bolstering and brand awareness from Amazon will only drive boundless growth for PillPack. I wouldn’t be surprised if PillPack was to Amazon what Instagram was to Facebook; a source of explosive expansion, where you didn’t think there could be any more. Facebook acquired Instagram for what was considered at the time an obscene $1 billion. Instagram is now valued at $100 billion. One. Hundred. Billion.
Amazon follows this suit. They have a laser focus of dominating all industries, and so far, they’re succeeding.
“With the acquisition, it will gain access to an established prescription delivery network with nationwide contracting and licensure that will open up the possibility of leveraging its e-commerce technology platform and expanding its sophisticated distribution model to include all prescription medications.” – Alison Wistner, CEO of UpWell Health.
Ultimately, PillPack need Amazon too. They have all the makings to be great; a clear vision and insight into a real customer need. But with competition like CVS, Walgreens, and GSK – huge players with deep pockets who would quickly copy their business model, they would have been struggling to maintain their place in the market.