(Reuters) - Amazon.com Inc said on Thursday it would buy small online pharmacy PillPack, a move that will put the world’s biggest retailer in direct competition with drugstore chains, drug distributors and pharmacy benefit managers.
The potential of Amazon’s (AMZN.O) move to disrupt major players across the drug supply chain on a nationwide level prompted a selloff in shares of potential future rivals, while sending its own shares up 2 percent.
PillPack supplies pre-sorted prescription drugs and other services for people who take multiple medications, a growing market as the U.S. population ages and requires treatment for multiple complex, chronic conditions.
The value of the deal was not disclosed. Bloomberg reported it to be $1 billion, citing a person it said was familiar with the matter.
The announcement cost drug store and medical wholesaler investors around $19 billion in stock losses on Thursday, while Amazon gained about $5.2 billion in value.
Shares of CVS Health (CVS.N) were down nearly 8 percent, while Walgreen Boots Alliance (WBA.O) fell 10 percent. Shares of drug wholesalers McKesson Corp (MCK.N), Cardinal Health (CAH.N) and AmerisourceBergen (ABC.N) also fell sharply.
The news comes just a week after a joint venture of Amazon, Berkshire Hathaway Inc (BRKa.N) and JPMorgan Chase & Co (JPM.N) named a CEO who will be tasked with significantly cutting healthcare costs.
Although brick-and-mortar stores might feel the effects of Amazon’s competition, the biggest battles will likely be fought by the mail-order pharmacies, which generally serve patients with chronic conditions such as heart disease that
