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We tried PillPack, the pharmacy startup Amazon acquired for $1 billion, and we can see why it has big pharmacies terrified

We tried PillPack, the pharmacy startup Amazon acquired for $1 billion, and we can see why it has big pharmacies terrified

My PillPack arrived in a simple white box marked filled with packets of prescriptions and information on when to take them.

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My PillPack arrived in a simple white box marked filled with packets of prescriptions and information on when to take them.
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Hollis Johnson/Business Insider

For most Americans, picking up a prescription involves a stop by the local pharmacy every month or so.

And while shoppers can go online for everything from clothing to groceries, that isn’t the case yet for prescription drugs.

That’s starting to change. In June, Amazon announced its plans to acquire PillPack, a small startup that mails prescriptions to people who take multiple medications for a reported $1 billion. The news sent a whole host of pharmaceutical and drug-wholesaler stocks tumbling at the time.

So we decided to take a firsthand look at PillPack’s prescription service to get a sense of how it works, and to better understand how it could fit into Amazon’s future healthcare ambitions.


My journey started through PillPack’s website, where I input some information about myself and set up an account.

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PillPack

Then, it was time to plug in my pills. I don’t have any prescriptions, so I skipped ahead to vitamins, picking a multivitamin and an omega-3 supplement and an iron supplement I later removed.

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PillPack

Then it was time to pick out my dispenser. For an extra $29, I could get a premium dispenser in different colors, but because I was only testing PillPack out for a month, I went for the disposable version.

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PillPack

After that, I got sent to my prescription landing page, which showed that my account was processing. Later that day, I got a call from a PillPack representative asking if I had any questions. The rep said that it may take some time for my prescriptions to sync up. If I had multiple prescriptions that had different refill times, it may have taken extra time for all of them to sync up and show up in my monthly dispenser. Because I was getting vitamins, PillPack billed me directly for those, and the charge didn’t hit my card until a week before my box arrived.

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PillPack

A few weeks later, the pills arrived in an unassuming brown package.

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Lydia Ramsey/Business Insider

As I opened it, I got my first clue about what was in store.

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Lydia Ramsey/Business Insider

Inside the package was the dispenser, instructions, and a business card with information about how to reach PillPack’s pharmacists. My box and the card let me know that my pills were coming from PillPack’s Brooklyn pharmacy.

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Lydia Ramsey/Business Insider

The instructions walked me through the basics of how to use the dispenser, including an explanation of the timestamps on each packet.

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Lydia Ramsey/Business Insider

With that, I was ready to go. My first pack was set to be taken at 8 a.m. on July 24.

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Hollis Johnson/Business Insider

Once that was done, I took a moment to check out the set-up. The dispenser had a much different feel from the pill canisters I’ve picked up from pharmacies in the past. It had information about what prescriptions were inside, how long I’d have until the pills ran out, and details about how to reach PillPack if I had more questions.

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Hollis Johnson/Business Insider

The only branding from PillPack was a small logo on the bottom left corner.

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Hollis Johnson/Business Insider

On one side of the pack, there was information about what’s inside and when it’s meant to be taken. On the reverse, I could see through the transparent packet what pill I had inside.

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Hollis Johnson/Business Insider

As I tore into the packet, I was struck by how easy it was (so long as i tore along the left side of the pack — my first attempt of ripping it open from the top did not go quite as well).

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Hollis Johnson/Business Insider

That accessibility is key when thinking about PillPack’s main demographic. PillPack’s approach of combining multiple prescriptions into individually labeled packs puts it in a good spot to handle prescriptions for elderly populations who tend to have more prescriptions. PillPack works with Part D and Medicare Advantage plans to provide prescriptions to members.

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Hollis Johnson/Business Insider

Source: Business Insider, Georgetown


My morning pack contained three pills — two fish oil supplements, one multivitamin — while my evening pack contained an additional pair of fish oil pills.

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Hollis Johnson/Business Insider

I decided to take a look inside my dispenser, and found the rest of my month’s worth of packs rolled up inside. I was surprised to see a pop of blue standing in contrast to the simple white appearance of the pills and the outside of the box.

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Hollis Johnson/Business Insider

The acquisition of PillPack was Amazon’s first big step into the pharmaceutical business. “PillPack’s visionary team has a combination of deep pharmacy experience and a focus on technology,” Jeff Wilke, Amazon’s CEO of worldwide consumer, said in a release in June announcing the deal.

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Hollis Johnson/Business Insider

Source: Business Insider


PillPack’s main physical pharmacy is in Manchester, New Hampshire, and the company can ship medications anywhere in the US except for Hawaii and Puerto Rico. For Amazon, that clears up a couple of hurdles that had hindered its ability to get into the pharmaceutical market. Most importantly, Amazon could use PillPack to ship out medications as an alternative to going to a brick-and-mortar pharmacy.

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Hollis Johnson/Business Insider

Source: Business Insider


Overall, the experience, from registering online to getting the shipment in the mail, was simple — no pharmacy visit required — and I could see the benefit of having my doses separated out by when I should be taking them. I can see where it might be a big help for people managing a number of complicated prescriptions. One thing is clear: With Amazon officially in the game, the pharmaceutical industry is in for a shakeup, and it could have a big impact on the way we get our prescription drugs.

My PillPack arrived in a simple white box marked filled with packets of prescriptions and information on when to take them.

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Hollis Johnson/Business Insider
Amazon beat out Walmart in a deal for a small pharmacy startup — and it shows just how intense the rivalry’s gotten

Amazon beat out Walmart in a deal for a small pharmacy startup — and it shows just how intense the rivalry’s gotten

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Daniel Becerril/Reuters
  • Amazon just signaled its intent to get into the pharmaceutical business through the acquisition of a startup called PillPack.
  • The deal came just a few months after Walmart was reported to be thinking of buying PillPack. Walmart lost about $3 billion in market cap on Thursday after Amazon announced it had bought the pharmacy startup.
  • That impact to Walmart’s valuation over a reported $1 billion deal shows how intense the rivalry between the two retail giants has gotten.

Amazon threw the entire pharmacy industry into a tizzy last week when it announced its plans to acquire PillPack, a small startup that mails prescriptions to people who take multiple medications.

Among the companies hit: chief rival Walmart, which lost about $3 billion in market cap after the deal was announced.

Walmart had offered $700 million for PillPack, but dragged its feet over regulatory concerns, according to CNBC. Amazon stepped in and offered a reported bid of just under $1 billion.

The stock drop which occurred as a result of Walmart not buying PillPack shows just how tense the long-simmering rivalry between Amazon and Walmart has gotten, particularly around the elderly population.

An aging population

The US population is aging. By 2050, the number of people over the age of 65 is expected to be double what it was in 2012.

An aging population means we’ll see an increase in health concerns and chronic conditions like heart disease, neurodegenerative diseases, and cancer that can be costly to manage. It also offers a business opportunity for those companies best placed to meet the healthcare needs of this growing population.

PillPack, with its focus on patients with a number of prescriptions to manage, squarely serves that aging population, and the bidding war over it suggests it’s a key area for both Amazon and Walmart.

Walmart has historically had an interest in the Medicare population. For example, Humana and Walmart have a cobranded Medicare drug plan and an initiative that provides healthy-food credits, and there were rumors that Walmart was considering buying Humana.

The aging population has been one of the few healthcare topics Amazon executives have addressed as well. In February, Babak Parviz, a vice president at Amazon, said at an event that the elderly was something “we deeply care about.”

Flipping out

The fight over PillPack is just the latest example of the two retailer’s growing rivalry. As Amazon moves further offline and Walmart moves further online, the two companies are beginning to clash more often.

Though Amazon ultimately triumphed with PillPack, it faced defeat in India earlier this year over another acquisition target. In May, it was Walmart that eventually bought approximately 77% of Indian e-commerce startup Flipkart for about $16 billion, beating out Amazon, which had also made an offer for the company, according to Bloomberg.

The Flipkart deal gives Walmart an edge on Amazon in the fast-growing Indian market, where Amazon is seen as number two when it comes to e-commerce, trailing Flipkart.

Flipkart and PillPack, when taken together, show a pattern of the two retail giants leapfrogging each other.

The CEO of Amazon, JPMorgan and Berkshire Hathaway’s joint healthcare venture has been selected and will be announced in two weeks –– here are some candidates who might fit the bill

The CEO of Amazon, JPMorgan and Berkshire Hathaway’s joint healthcare venture has been selected and will be announced in two weeks –– here are some candidates who might fit the bill

Warren Buffett, Jamie Dimon, and Jeff Bezos are among the CEOs thinking of new ways to curb healthcare costs.

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Warren Buffett, Jamie Dimon, and Jeff Bezos are among the CEOs thinking of new ways to curb healthcare costs.
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Jenny Cheng/Business Insider

We’re about to learn who will be leading the healthcare ventures set up by Amazon, JPMorgan, and Berkshire Hathaway.

Back in January, Berkshire Hathaway’s Warren Buffett, Amazon’s Jeff Bezos and JPMorgan’s Jamie Dimon announced a joint, non-profit healthcare venture they will be pursuing aimed at improving satisfaction and reducing costs for their U.S. employees. The announcement caused healthcare stocks to plummet.

At that point, very few details were released about what the tie-up would look like. But Buffett and Dimon told CNBC last week that they’d announce the new CEO within the next two weeks.

In the meantime, speculation has been brewing about who might be the person to step into the role. According to a report by Bernstein analyst Lance Wilkes, the key attributes for the potential CEO should include the following:

  • Visionary and disruptive
  • Experience with business, clinical and policy sides of healthcare
  • Someone not too old, as they’re going to be leading the effort for five to 10 years
  • Preferably from a non-profit or private company

Based on public data and analysis, here are some of the candidates Bernstein thought would fit the role.


Gary Loveman

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BSGSpeakers / Youtube

Gary Loveman was the head of Aetna’s consumer businesses from October 2015 to February 2018 and was also CEO of Caesars Entertainment Resort Properties. He has over 15 years of experience in service management.


Rick Jelinek

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CNBC / Youtube

Rick Jelinek has been a strategy and integration leader at Aetna since November 2015. Prior to that, he was CEO at UnitedHealth Group.

As part of the merger between CVS Health and Aetna, CVS said in June that Jelinek will serve as CVS Health’s executive vice president.


Matt Manders

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Managed Healthcare Executive / Youtube

Matt Manders has had a 30-year career at Cigna HealthSpring and served as president of regional and operations. He retired from the company in late 2017.


Dr. Patrick Conway

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The CEDNC / Youtube

Dr. Patrick Conway is CEO of Blue Cross North Carolina, and was a former head of Centers for Medicaid and Medicare Services’ Innovation Center. During his six years at the CMS, Dr. Conway oversaw the agency’s big push into value-based reimbursement.


David Feinberg

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getseen via Flickr

David Feinberg is CEO of Geisinger, an integrated healthcare system including 13 hospital campuses, two research centers, the Geisinger Commonwealth School of Medicine, and a health plan that serves approximately 600,000 members.

Although CNBC reported last week that he was the top pick to run the new company, Feinberg said that he is committed to Geisinger.


Amir Rubin

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Stanford Medicine X / Youtube

Amir Rubin has been the CEO of OneMedical, a venture-backed primary care group, since July 2017. He was previously the executive vice president of UnitedHealth’s Optum division and CEO of Stanford Health Care.


Owen Tripp

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Rock Health / Youtube

Owen Tripp is CEO and a co-founder of Grand Rounds, a startup matches patients with the right doctor and also sells second medical opinions. He was also the co-founder of Reputation.com, which helped people clean up their online records.

Tripp told CNBC in a statement in May that he’s committed to staying at Grand Rounds. “To the extent we can be part of their solution as their mission sharpens, we’d be glad to pitch in – just as we would assist any organization that wants to improve clinical outcomes,” he said.


Chris Grant

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Ted Eytan / Flickr

Chris Grant serves as the chief operating officer of Kaiser Permanente. Previously, he was senior vice president for corporate development, care delivery strategy and venture investments, and executive managing director of Kaiser Permanente’s venture capital group.

Grant is experienced in business development especially for ventures in healthcare and medical technology.


Dr. Marc Harrison

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Marc Harrison
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Intermountain Healthcare / Youtube

Dr. Marc Harrison has been the CEO of Intermountain since October 2016. He was previously Chief of International Business Development for Cleveland Clinic.

When Harrison stepped into the CEO role, he planned to build the “Tesla” of health systems.


Andy Slavitt

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Centers for Medicare & Medicaid Services

Slavitt was the former head of CMS under President Barack Obama. In May 2018, he launched Town Hall Ventures to invest in healthcare.


Todd Park

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Official White House Photo by Chuck Kennedy

Todd Park was the former chief technology officer for the US government. He has also co-founded Athenahealth, a health IT company, and Castlight Health, which works with employers to help their employees navigate their health benefits.


Peter Orszag

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Lawrence Jackson, official White House photographer

Peter Orszag is the vice chairman of investment banking at Lazard, where he also is the global co-head of healthcare. He was also former director of Office of Management and Budget under Obama.

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