11 ms·

Amazon buys PillPack, an online pharmacy, for just under $1B

576 points by dogichow 8y ago

mchahn 8y ago
As an early adopter of PillPack I can say that it is awesome. Not only are the packs very convenient (no more bottles, knowing when you forgot to take drugs) but the customer service is the best I've ever experienced. I had tried to use the mail-order drugs provided by insurance companies and they were a disaster. I couldn't find out what was coming when. Drugs would seemingly-randomly show up in my mailbox.
charleyma 8y ago
Meanwhile, CVS + Walgreens lost $6B in market cap on the news Amazon is moving directly into pharmacy space. It's crazy how competitive Wall Street views Amazon moving into a market; have there been examples of Amazon making a large purchase/move but completely failing? (sure there are, just not coming me off the top of my head)
- elvirs 8y ago
  this happens all the time. wall street makes money from stocks going up and down, they are designed to react to anything by sending stocks up or down. you can confidently buy some CVS Walgreens stock because I bet that stock is climbing back up within weeks
  - xkjkls 8y ago
    I'm pretty sure the investors on Wall Street are far more sophisticated than just your "confidence".
- chrischen 8y ago
  Fire phone. Though I'm not sure if it was a purchase.
- tetrep 8y ago
  https://en.wikipedia.org/wiki/Fire_Phone https://en.wikipedia.org/wiki/Fire_Phone
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- Nav_Panel 8y ago
  Seems like in any market where Amazon can reasonably compete with a brick & mortar, Amazon will win... Consider how expensive real estate is these days, especially in urban areas (and how much "millennials" like delivery). It's a solid formula.
  - njarboe 8y ago
    And they have a large brick & mortar presence with Whole Foods.
  - jburwell 8y ago
    It's not just millenials in this case. I am an GenX-er with a wife and two kids. We are planning to switch to a mail order pharmacy (Pill Pack or Costco -- dependent on cost) in the near future. My wife, one of our daughters, and our dog (on a human med) taking regular meds. Even being a 5 minute drive from a brick and mortar pharmacy, and it is still a PIA. None of the scripts are on the same schedule so we make multiple trips. Inevitably, you get in line behind someone with a refill or insurance issue turning a quick pick into a 20 minute wait. A service that syncs up script refill schedules and works with doctors and insurance companies on refills renewals is a massive time saver and stress reducer.
  - jklein11 8y ago
    But think about how much it costs to have the item physically delivered. There is no way that Amazon can make money on a $10 item that they need to deliver in a two day time frame.
- blowski 8y ago
  They invested $175M in LivingSocial, rebranded it "Amazon Local", then killed it off.
  - pseudalopex 8y ago
    Amazon owned part of LivingSocial and also operated Amazon Local. LivingSocial eventually sold to Groupon.
    - blowski 8y ago
      Ah thanks for the correction
- mtmail 8y ago
  1999 Amazon when after Ebay with Amazon Auctions, about the same time Amazon zShops (now Marketplace) started. Back then a big bet in terms of money and resources that failed. https://glinden.blogspot.com/2006/04/early-amazon-auctions.html https://glinden.blogspot.com/2006/04/early-amazon-auctions.h...
- simonsarris 8y ago
  All the time. They tried to make a move into retail registers to compete with Square, and failed. They shuttered Amazon register in 2015: https://bits.blogs.nytimes.com/2015/10/30/amazon-shutting-down-its-register-credit-card-processor/ https://bits.blogs.nytimes.com/2015/10/30/amazon-shutting-do... They tried to take on Etsy with Amazon Handmade which bombed Etsy stock, but Handmade has gone pretty much nowhere, except some re-branding this year. People just forget Amazon's failed ventures, even fairly high profile ones, because there are so many, and the hits sometimes so large (like AWS). Quoting myself from April: > Amazon's ethos of "Announce fast, Release fast, if it fails, oh well" is intentional. From Bezos' point of view, this is actually a feature. In a shareholder letter in 2016, he called Amazon "The best place in the world to fail." He wants lots of teams working on lots of products, and if some of them don't pan out, that's OK. This has lead to a lot of successes, but also a number of small headaches for consumers who use products that are quickly discontinued and (charitably) forgotten.
  - cabaalis 8y ago
    > They tried to take on Etsy with Amazon Handmade which bombed Etsy stock, but Handmade has gone pretty much nowhere, except some re-branding this year. Is severely damaging another online vendor really a failure for Amazon? It seems to me at that level, revenue from a venture is not always the only measure of success.
    - simonsarris 8y ago
      I had wondered that. Disclaimer, I'm long SQ. If you're following AMZN, SQ, or PYPL, you probably saw the headlines back in April: Amazon's Next Mission: Using Alexa to Help You Pay Friends Firm looks to make voice commands the next wave of commerce SQ and PYPL took a small dive on this news, even though at face value, its quite silly. Amazon would probably have a much better time trying to buy PayPal for Venmo or Square for Cash App but also to compete in the small-biz transaction field that Amazon tried and gave up on. Building out such a service based on Alexa users is wacky, and there doesn't seem to be a pressing need to let loose your wallet via voice. Personally, I think it's somewhat unlikely that AMZN would acquire PYPL due to a clash of cultures when it comes to customer service. (Amazon's: Very good. PayPal's: Legendarily evil). This reputation may also be the reason PayPal has kept their own name off of their Venmo acquisition product until very recently. I think there is a very slight chance that AMZN would try to acquire SQ. It would allow them to really break into small-vendor retail where they have failed with homegrown solutions before, and give them instant access to a growing P2P transaction market. Everybody loves to speculate about such acquisitions, though. ...But it would certainly be funny if the only reason Amazon made that press release was to butter up one of those two companies for acquisition, either by decreasing their share value or exerting pressure on them internally to agree to a deal before they face Amazon's competition.
- jdhn 8y ago
  CVS is down 8% right now, Walgreens is down 9%, and Rite Aid is down 10%. Investors are very nervous right now.
  - hahnpv 8y ago
    Short term voting machine, long term weighting machine
  - brianbreslin 8y ago
    I made a small bet earlier in the year thinking AMZN would buy Rite Aid. ah well.
- ProAm 8y ago
  No different than when Garmin's stock collapsed when Google announced free Maps/Navigation [1][2]. It's just the market reacting to supply and demand. [1] http://www.macnn.com/articles/09/10/28/google.maps.helps.gps.maker.stock.crash http://www.macnn.com/articles/09/10/28/google.maps.helps.gps... [2] http://www.businessinsider.com/googles-free-gps-service-crushes-garmin-tomtom-shares-2009-10 http://www.businessinsider.com/googles-free-gps-service-crus...
  - atourgates 8y ago
    And caused a sea change for the industry and Garmin's business model. Garmin's automotive segment revenue has dropped from $2.5-billion in 2008, to $700-million in 2017. [1] They've been able to largely make up for it with revenue from other sources, [2] (mostly outdoor/fitness) [3], but I'm sure that shift and innovation was driven by the event you mentioned. [1]https://www.statista.com/statistics/217901/net-sales-in-the-automotive-segment-of-garmin-since-2008/ https://www.statista.com/statistics/217901/net-sales-in-the-... [2]https://www.statista.com/statistics/217907/net-sales-of-garmin-since-2009-by-quarter/ https://www.statista.com/statistics/217907/net-sales-of-garm... [3] https://www.statista.com/statistics/217905/revenue-distribution-of-garmin-by-segment/ https://www.statista.com/statistics/217905/revenue-distribut...
    - pm90 8y ago
      Wow those are staggering numbers! Props to Garmin for surviving a 60% reduction in revenue... I would've expected the company to just fold after that kind of loss.
    - jedberg 8y ago
      And most of that revenue surprises me. My car has a Garmin system built in (Honda). I never use it. I just connect my smartphone with CarPlay and use Waze (which will be even easier in September when it will show on the main touchscreen). So in my case, I paid money to Honda who in turn paid it to Garmin for something I'll never use, just so they can say it "comes with Navigation". I wonder how long that will last before no one cares if a car comes with navigation. I've already seen high end cars being sold without navigation, and just marketed as "smartphone ready". I suspect in a few years either all the cars will be sold that way, or they will all be self driving and get their navigation elsewhere.
- rabidonrails 8y ago
  Remember the fire phone? Neither does anyone else.
- prostoalex 8y ago
  The target market is dominated by seniors, who no longer have to drive to a local pharmacy and hang around the store while waiting for the subscription to be fulfilled. I am frankly surprised no dominant online player has emerged yet. Perhaps the shipping costs were a constraint?
  - petra 8y ago
    True, maybe shipping was a constraint. can any random guy ship drugs ? isn't some special supply chain required ? Another guess is that changing habits(especially since buying drugs is an infrequent event, and that we're dealing with seniors) and creating trust we're other reasons.
    - Bartweiss 8y ago
      PillPack is basically a supply chain company - it's not an easy field to get into. I don't know if "who can ship these" is a big hurdle, though. Possibly a bigger issue is "doctors and patients are used to calling prescriptions in to pharmacies". But the main issue with drug delivery is the need for reliability; you can't have somebody's heart medication ship out late or get lost in transit, basically ever. And if you change offerings or go out of stock on specific products (which most retailers do often), you'll quickly be seen as an unreliable way to get any kind of regular medication. Plus, you can't let any fakes or low-quality products into your supply chain - so sourcing new suppliers is hard, but running out of suppliers for any single product is a crisis. So being an online seller for use-as-needed prescription meds might be easy, but the bulk of the money is in people taking drugs daily, and that stuff is damned hard to offer.
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  - Bartweiss 8y ago
    Actual shipping costs aside, being a delivery channel is way harder for drugs than for most other things. Amazon is reliable, sure, but what do they have - 99.9% fulfillment, 99% on time, 99% with authentic products, 97% of listed products in stock? Those are guesses, but apply those numbers to delivering vital daily medicines and the problem becomes pretty obvious. Keeping in-stock rates high and "on time with authentic products" rates near 100% is not an easy task. It's not something pharmacies do perfectly either, but their shortages are generally at a store level rather than national, and they're not asking people to completely switch delivery mechanism to trust a space with online one provider.
- xkjkls 8y ago
  They tried a travel site once; they tried to sell insurance once; they tried to make a phone once; etc. They fail a lot of the time, but sometimes even when they do, it's a kick in the ass to some of the other competitors in the field, which causes them to depress their margins. So sometimes, even if Amazon's presence in the market fizzles out, they end up still reducing other's prospects.
- ianamartin 8y ago
  Phones.
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rocketpastsix 8y ago
Just another step in dominance for Amazon. Pretty soon you will be able to upload your prescriptions to Amazon and Prime Now will deliver within an hour, for $8.99
- throwaway5752 8y ago
  Realistically, CVS/Walgreens will hire lobbyists or member of the Trump circle and the president will tweet some bellicose messages about WaPo and Bezos that will result in antitrust action. This isn't the same country as it was 3 years ago. Amazon is playing with fire a bit here. This my last edit, but I'm definitely leaving this up so people can link back to it in 18-24 months. edit: Downvote me if you will, but it's public record that he thought it was perfectly fine to threaten a small restaurant (https://twitter.com/realDonaldTrump/status/1011212766487728133 https://twitter.com/realDonaldTrump/status/10112127664877281...), German car co's (https://twitter.com/realDonaldTrump/status/1010166772912320513 https://twitter.com/realDonaldTrump/status/10101667729123205...), Harley Davidson (https://twitter.com/realDonaldTrump/status/1011584315040419840 https://twitter.com/realDonaldTrump/status/10115843150404198...), and (at prior points) Amazon (https://twitter.com/realDonaldTrump/status/979326715272065024 https://twitter.com/realDonaldTrump/status/97932671527206502...). Countries and companies that have made policy decisions favorable to his family have gotten favorable treatment (KSA, China, Russia, DPRK), and those that have done otherwise (Qatar, AT&T/Time Warner, NFL) have suffered tangible repercussions.
  - UnpossibleJim 8y ago
    How has this not been a thing since Reaganomics became standard policy for the last 6 administrations?
    - mrguyorama 8y ago
      I think he is specifically calling out the "tweeting" portion. IE, yes, companies have been lobbying to block their competitors for a while, but it's a fairly recent trend that all you have to do now is tell Trump he's the best and he will put out a twitter hit campaign against your competitors
sidcool 8y ago
This is huge. If I were into pharma business I would be very worried for my business.
- adventured 8y ago
  It's not huge. Walmart, which is even more competitive on pricing in retail than Amazon, entered the pharma prescription business many years ago. They deployed pharmacies to over three thousand physical stores and are the third or fourth largest pharmacy in the US. Amazon will have no greater impact than what Walmart did. How did Walmart impact CVS and Walgreens? Both continued getting larger. Maybe Amazon will drain some or most of the remaining growth in the segment by taking a slice of market share. More likely it'll just end up being an expensive, terrible business that struggles, like most of Amazon's ventures (they fail far more often than they succeed).
tombrossman 8y ago
This is interesting because Amazon isn't exactly known for supply chain integrity. Who here hasn't received fakes from Amazon? If you rely on a specific medication for your health, is Amazon a brand you trust to deliver it? How long until they start commingling pills and shipping random counterfeit/fake product to users? Hope it never happens but if they do with pharmaceuticals what they did with everything else they sell, it's only a matter of time before users are physically harmed. Let's be optimistic though, I hope this helps them finally get their shit together and control the rampant counterfeiting going on right under their nose.
- Texasian 8y ago
  Maybe this is related to Amazon's health venture? Both it and Pillpack are based in Boston after all.
  - xkjkls 8y ago
    Possibly, CVS has a program which uses it's big discounts it gets on the drugs it sells in stores to sell them to employees for their health care needs: https://www.benefitnews.com/news/cvs-e-prescription-program-aims-to-help-employees-pay-less-for-medications https://www.benefitnews.com/news/cvs-e-prescription-program-...
- protonimitate 8y ago
  I understand the fear, but I don't think fake medicine is as big of an issue as fake market place items. PillPack already has an established distribution network and prescription delivery licensing in 50 states. I don't know for certain, but I would assume that fake prescription medicine is a much bigger risk and would threaten the operation more than, say, fake batteries.
  - Aloha 8y ago
    It's likely they'll integrate on the ecommerce side of things, not on the supply chain side anyhow - the economy of scale that amazon has for shipping will be beneficial.
yohann305 8y ago
i see a lot of comments here of people worrying about counterfeit pills distributed on Amazon. A counterfeit drug in USA is a ticket straight to jail, but a counterfeit mug or yoga mat isn't such a big deal. I wouldn't worry about it so much especially because it's not an open marketplace since Amazon will use Pillback as the distributor
- chrisper 8y ago
  I think what we will see is AmazonBasics Aspirin and stuff like that. They are usually not fake.
- c3534l 8y ago
  People have some very naive views about how one of the most regulated industries in the world operates. A big pharmacy can't just buy drugs from a random internet source and give it to you based on how many users gave that seller positive feedback. I don't know how they think the pharmaceutical industry works in the US, but the idea that Amazon is going to start selling fake medicine is absurd.
jtchang 8y ago
Hopefully Amazon will be able to get rid of express scripts. They are the ultimate middleman sucking both pharmaceutical companies and consumers dry.
- eurticket 8y ago
  This does look like a death blow from multiple angles for ES. I think ES does provide a service that people want regardless if it hurts Pharmacies and it doesn't hurt consumers if they want to pay for the service; but maybe it affects drug prices in other ways? If the Cigna deal fails to go through they both owe some billions, coupled with Amazon in their space, ES looks doomed.
  - shawn-butler 8y ago
    If Cigna's deal to acquire Express Scripts is terminated, either party could owe a fee of either $2.1 billion or $1.6 billion depending on the reason for the breakup, according to the filing.
- supertrope 8y ago
  Why are you sympathizing with pharmaceutical megacorporations that are able to raise the price of medications faster than inflation (e.g. 8%)?
rglover 8y ago
Captain Bezos takes us one step closer...https://www.youtube.com/watch?v=s-kdRdzxdZQ https://www.youtube.com/watch?v=s-kdRdzxdZQ
hendersoon 8y ago
Pillpack is a very useful service, particularly for people who take multiple medications. You get a little pack with the date printed on it so you never have that "did I take my pills this morning?" question. Their pricing is fine, and delivery is always on-time. Only problem I've seen is that they often (and I mean OFTEN) forget to apply medication savings cards, which adds up to quite a lot of money. I had to complain about this eight or nine times and ultimately escalated to one of their founders, a guy by the name of Eliot, to get this addressed. However, they may have fixed the problem as they haven't overcharged me so far in 2018. Prices are set by insurance and shipping is already free so I can't see how Amazon would improve on that. I imagine their margins are razor-thin, but it's pretty clear this sort of service will be how everybody gets their medicine in the next couple of years so the volume makes sense for Amazon.
kolbe 8y ago
The cumulative loss to CVS's and Walgreens's market caps has been about $12b. If Amazon had wanted to, they likely could have made more from the destruction of value to those companies than they paid to buy PillPack. I wonder what other industries out there can be arbitraged like this. I bet Amazon could shave well over $10b of market cap off of BKNG if they made the right strategic investment.
- beagle3 8y ago
  IANAL but I suspect it is actually legal for Amazon to short CVS+Walgreen in this case: Don't "inside information" trading laws apply only to the specific company about which information is available?
  - kolbe 8y ago
    Even though insider trading laws can be quite nuanced, this is 100% legal.
  - CGamesPlay 8y ago
    Doesn't the person on the other end of the short sue Amazon for having insider information material to the value of CVS+Walgreens? Or if not "insider trading", then "market manipulation"?
    - beagle3 8y ago
      Insider information is not well defined, but I don't believe that it covers this case (then again, IANAL). "Market manipulation" is dissemination of false information or demand with the express permission of profiting. But there was no false information or demand here.
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harshaw 8y ago
I interviewed at Pillpack years ago and was very impressed but didn't get the gig. They seemed to be solving a great problem for customers using multiple medicines. I am not sure the solution works well for the millions of us taking one pill every night, e.g the "pillpack" is wasteful. It also doesn't address this really annoying problem I have getting my daughter's ADD meds. These require a paper prescription that must be hand couriered to the local CVS. A giant PITA.
- cabaalis 8y ago
  I'm curious if you know why the ADD meds must be hand-delivered when government is actively incentivising e-prescribing among providers?
  - mikeatlas 8y ago
    Controlled substance and cannot be prescribed more than 1mo supply at a time.
    - nickthegreek 8y ago
      It is a huge pain. Even if your prescriber gives you 3 prescriptions (1 month each, which I think is the maximum amount of time for a controlled substance in a single prescription), the entity that is fulfilling that order is not allowed to hold onto the other 2 for future fulfillment.
      - racecar789 8y ago
        Yeah the doc can put a "do not fill before [date]" and schedule scripts out for three months. Both CVS and Rite-Aid have an arcane system where controlled prescriptions are kept "offline". Their websites will not show the scripts as available to refill even if the doc has prescribed ahead of time. So one has to call to confirm the script was received, then call every month a refill is needed. But even worse...Rite-Aid requires a mandatory 30 day wait (per 30 day script). So that means on the day of refill...one needs to rush over early in the morning to get the refill, otherwise will risk missing a dose. CVS is a little better, allowing a 3-5 day early fill. But they also have their secret "offline" system for controlled substances. It's still a royal pain. So for Amazon...very little effort is required to succeed...simply show scripts that the doctor has sent over on their website...and offer a 2-5 day early fill....CVS/Rite-Aid won't stand a chance....
Molaxx 8y ago
The issue isn't fakes, it's the fact over medication is a real problem. Thank heavens that where I live drug advertising is illegal. After a visit to the US and encountering the brainwash machine of drug companies I realized just how important this law is.
- lovetrump 8y ago
  at least they have to list all the side-effects in their ads, but it is still crazy...
- taf2 8y ago
  Dont worry the side effects include certain death you’ll be super happy on this pill!
wjp3 8y ago
Maybe they can bring reliability, accuracy, and better customer service - because my experience with PillPack was terrible. Dropped them after a little over a year.
egyptiankarim 8y ago
I wonder if Amazon hopes to eventually get into manufacturing of pharmaceuticals. How long before we start to see AmazonBasics versions of Aspirin?
- supertrope 8y ago
  That doesn't seem especially profitable nor a core competency of AMZN. When you see a store branded bottle of ibuprofen, it's just a re-label of their contract manufacturer's pills.
  - upvotinglurker 8y ago
    Yep. The AmazonBasics brand of aspirin may appear, but it will just be putting their label on the product manufactured by the companies already specialized to manufacture it (as is probably true with a lot of existing AmazonBasics products).
- AtTheLast 8y ago
  Don't they already do that with the basic care line of products.
LinuxBender 8y ago
Will this also expand Amazon's catalog of non-prescription supplements, such as vitamins, amino acids, co-enzymes, probiotics, etc.. ?
mrfusion 8y ago
Just an FYI. I measured the inside temp of my mailbox in August’s once and it was 150 degrees. You want to be careful getting medications in the mail.
- jonknee 8y ago
  How do you think the medications get to your local pharmacy?
  - ceejayoz 8y ago
    Via climate controlled aircraft, distribution facilities, and relatively well ventilated delivery trucks? No step in the retail pharmacy supply chain involves routinely putting it in a small black box sitting out in the sun until you get home from work in the evening.
    - notyourwork 8y ago
      Perhaps in long term Amazon drones with climate controlled container could drop the medicine off.
      - jonknee 8y ago
        Or they can just deliver it like they do now without issue.
    - Merad 8y ago
      I’d be utterly shocked if you’re correct. Controlled substances most likely do get some kind of kind of courier delivery, but there’s no reason to do it for anything else. If it needs to stay cold you slap in an insulated box with ice packs. I’ve gotten deliveries before from Blue Apron and Omaha Steaks. Believe me, they have no problem keeping things cold.
      - ceejayoz 8y ago
        You seem to think I'm describing some special courier service. I'm not. I'm describing the standard USPS/UPS/FedEx experience all packages get, which is indeed how most of the stuff a retail pharmacy gets will be shipped. The parent's concern with direct-to-home delivery is valid - the inside of an in-sun mailbox on a 90 degree day is going to well exceed safe thresholds for many medications in a way the rest of the shipping chain won't.
seibelj 8y ago
Congrats to Techstars Boston and the first unicorn exit of a Techstars company! Awesome news
finnthehuman 8y ago
Large parts of PillPack were being mismanaged into the ground, I trust Amazon can fix them but at the same time my first reaction to the news was to text my non-programmer-or-management friends there about when they’re quitting. If Amazon’s warehouses or Whole Foods are any indication of how they’ll approach the unavoidable human work involved at a pharmacy, I have serious doubts about the quality of service. And pill pack is already in a pretty sorry state.
- cflewis 8y ago
  What do you think were mismanaged? I've used PillPack for years and I've been very happy.
- zavi 8y ago
  What unavoidable human work at pharmacy? Authenticate patients and ship them prescriptions. Even CVS is doing it now.
  - djrogers 8y ago
    GP is likely referring to the requirement for humans to count and verify the packs of pills. FDA rules don't allow all of that to be automated away.
  - finnthehuman 8y ago
    You know a pharmacy does more to fill a prescription than just count out pills on a slip of paper, right? How many pharmacists and pharm techs can be automated away by amazon that pillpack hasn’t already? And this is just a rhetorical question, neither of us are really qualified to address all the tasks to be done, nor current automation levels.
vedtopkar 8y ago
PillPack and other services like it can be life-saving. I'm only a second year medical student and I already can't count the number of conversations I've had with (especially elderly) patients about concerns regarding med adherence when burdened with a large number of prescriptions.
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duxup 8y ago
PillPack sounds like the name of a black market drug company.... interesting name.
- upvotinglurker 8y ago
  In what way? And isn't "black market company" an oxymoron?
unixhero 8y ago
Paul Leroux called, he wants his ebiz back! ;)
hnburnsy 8y ago
Hope this is not redundant, but I believe that this deal gives Amazon a license to sell drugs in all 50 states.
- hnburnsy 8y ago
  Just heard it is 49 states as PillPack is not in HI. Edit, Adding source: https://www.pillpack.com/questions/can-you-ship-prescriptions-to-my-state https://www.pillpack.com/questions/can-you-ship-prescription...
Rotten194 8y ago
I used a mail order prescription service for a while (ExpressScripts). It was awful. They routinely lost, failed to ship, or double-shipped packages, and I got multiple bottles of pills that had expired due to being left in the heat. I, personally, will never trust mail order prescriptions again.
- whoisjuan 8y ago
  You're judging all the category by the performance of a single provider. I understand that, but I wouldn't discard the helpfulness of this concept just by your experience with one vendor. That's like not driving a car anymore because you had a bad experience with a particular brand.
- djrogers 8y ago
  Curious - how do you know said drugs had 'expired'?
ck2 8y ago
ah the power of extracting money from health insurance if people were paying out of pocket these kinds of markup could not survive fun fact: thanks to lobbyists and congress, it is illegal under federal law for a pharmacist to voluntarily tell you it cheaper to pay cash than use your insurance co-pay, you have to know to ask
- supertrope 8y ago
  Which law? Plenty of medical workers will tell you to take advantage of $4/month generic deals, especially if a significant proportion of patient populations is disadvantaged.
c3534l 8y ago
Pharmacies and benefit management companies have become very consolidated in recent years. And from what I've seen (which I'll have to be cryptic about since I don't want to accidentally reveal personal information about myself or anyone I know), it's not been to the benefit of consumers. Big evil companies that make money by screwing over sick people have been doing the 80s slash-and-burn consolidation thing where good companies are bought, existing customers are screwed over, and some small fraction of the company is absorbed into the greater machine. Buy a good company, deny people their medication, then make money off the difference until the customers leave for another company, then finally buy that one and repeat the cycle. This means getting in there is going to be very profitable, and if amazon can get in there are use its existing scale they can get quite rich. There's now three benefit management companies that are in charge of altruistically deciding what medications you can afford. On the one hand, Amazon breaking up this pathological oligopoly would be good for consumers, but if it's really a market structure thing we run the risk of there still being on three companies, but with Amazon instead of CVS, ExpressScripts, or United Health.
bugsense 8y ago
NURX (YC W16) is hiring by the way and it will be bigger than PillPack https://www.nurx.com/careers/ https://www.nurx.com/careers/ as it also prescribes
jaytaylor 8y ago
What about the environmental impact of the PillPack packaging strategy? http://assets.coolhunting.com/coolhunting/mt_asset_cache/2014/02/pillpack-1-thumb-620x508-75620.jpg http://assets.coolhunting.com/coolhunting/mt_asset_cache/201... (note: above image is of an already mostly empty PP box, they often come stuffed completely full) https://cdn.vox-cdn.com/thumbor/Jz4Xw7Xs-Fxnige1c2qnDlez-c0=/0x18:1100x751/1200x800/filters:focal(0x18:1100x751)/cdn.vox-cdn.com/assets/3968063/PillPack_Shipment.png https://cdn.vox-cdn.com/thumbor/Jz4Xw7Xs-Fxnige1c2qnDlez-c0=... I used PillPack a few years ago, and appreciated the reliable auto-refill (in fact their behavior was borderline insanely aggressive, which was fine by me). However, the volume of single-use plastic trash created by the way PillPack does packaging was downright excessive, and I felt so guilty about it I deactivated my account. It is less convenient now, but after going back to using typical mail-order and local B&M pharmacies in town the process results in approximately 10-20% of the amount of trash. See the images linked above as examples of what comes with each shipment - it's a plastic case full of little plastic pouches. There is 1 plastic pouch per dose of medication, and the plastic pouches are wound tightly inside. The volume of single-use plastic adds up rather quickly with PillPack. EDIT: Why all the downvotes? "Internet points" are unimportant, but it is curious and unsettling to see information about wasteful high-pollution corporate practices deep-sixed.
- rrcaptain 8y ago
  How many pills were you taking daily? The plastic waste of 4-5 pill bottles a month is quite large. But yes it is wasteful, just like the rest of for-profit healthcare.
  - gehwartzen 8y ago
    I agree; The film pouches used by PillPack look to use significantly less plastic than those orange bottles.
- petra 8y ago
  There are probably ways to create a cleaner packaging system. But I'm not sure if the plastic problem (a huge one, and I really love nature) will be solved by individual action. In practice it would require laws, like the anti plastic bag law reduced demand by 70% in the Netherlands. Or technology, like a better bio-degradable plastic alternative.
nwcs 8y ago
There are some interesting security issues in the underlying systems that pharmacies like PillPack use. Here is a security advisory for PillPack from 2015: https://wwws.nightwatchcybersecurity.com/2015/04/30/advisory-pillpack-com-online-pharmacy/ https://wwws.nightwatchcybersecurity.com/2015/04/30/advisory... Basically the system that pharmacies used to transfer prescriptions isn't secure
- dmix 8y ago
  You're basing this off a 3yr old security review of a 2yr old startup (at the time: founded in 2013, reviewed in 2015)? Got anything more recent? 3yrs is a lifetime in startup years. Plus they now have plenty of money to hire the best security firms to pen test their systems, plug holes, and run a serious monitoring operation.
  - nwcs 8y ago
    PillPack was founded in 2013: https://www.crunchbase.com/organization/pillpack https://www.crunchbase.com/organization/pillpack Also read the advisory - the issue is not with them - it's with the legacy prescription transfer systems they hook into. That is something they cannot hire someone to pentest without getting all of their competitors to agree.
dkresge 8y ago
Is the physical volume of the average pill predominantly "active ingredient"? If not, why not just "print" a single pill per customer-dose comprised of the prescribed constituents?
- brandonmenc 8y ago
  For some pills, not even close. This is why you can't just split any old pill and expect a partial dose.
ConcernedCoder 8y ago
Instantly licensed to sell/ship pharmaceuticals in the entire USA @ 20 million per state, not bad...
iamaelephant 8y ago
No company should be as big as Amazon is getting. I hope American regulators look seriously at breaking this company up.
swami26 8y ago
If people took their medication properly, healthcare costs would lower dramatically - on the tune of $300 billion. Pill pack's medication packaging increases proper medication use thereby lowering health costs. This purchase gives Amazon an entry into online medical pharmacy and a solid method to lower health costs. Further,Walgreens, CVS, and Walmart show that people are likely to buy lots of non-prescription products when getting their prescription so this purchase will likely boost Amazon's general commerce business as well. Link describing medication adherence potential health care savings. http://www.heart.org/HEARTORG/Conditions/More/ConsumerHealthCare/Medication-Adherence---Taking-Your-Meds-as-Directed_UCM_453329_Article.jsp#.WzWoO_ZFw2U http://www.heart.org/HEARTORG/Conditions/More/ConsumerHealth... Link describing medication adherence and Pill Pack. https://www.pillpack.com/healthcare-providers https://www.pillpack.com/healthcare-providers
zitterbewegung 8y ago
It seems that Amazon wants to become not only where you buy your stuff but also your Grocery and get Prescription drugs. I guess the play is that they are seeking out more places where to expand in a large way. Pharmacies are a big cash cow and entering in this space is not going to be trivial. On the other hand imagine what you could do with the data . Lets say you have clinical depression. Maybe it would recommend you a medical food such as Deplin or even the l-methylfoliate.
Cents 8y ago
This was so needed. Can they hasten the paper work doctors and insurance companies require? Amazon.com "Instant gratification at the speed of UPS." /g
ataturk 8y ago
I worked for a company that does online pharma. It was an incredibly annoying experience in a lot of ways to the regulatory headaches and the IT group's horrifying and irrational risk aversion--fear based programming is just no fun at all! Also, it was an all IBM shop, because some of the founders came from IBM and apparently still got kickbacks or something. What a shitty situation all around. Here's just one example: My team was not allowed to use Tomcat. We wanted to move to embedded Tomcat for our web apps because it was so much easier to deal with versus Websphere and all that thing's baggage. IBM's JVM sucks. IBM's RAD environment sucks. IBM's build tools (headless RAD) totally fucking sucks. It was thus impossible for such a small team to get anything done with all these headwinds, so all we wanted was to run Tomcat or Jetty which many of the company's vendors already supplied in-house applications ran on. The IT Dept. wanted to commission a multi-year study on Tomcat even though I showed them they are already running it inside their walls and have been for years! The place made utterly no sense to me. It was just job security for crumb bums, I guess. I finally gave up when they doubled down on mainframe purchases and waterfall methodology. How they remain in business is beyond me. Amazon will fucking stomp them into the mud, probably.
ExactActuation 8y ago
Just wanted to say it's pretty sad a company like PillPack even has to exist - it shows we're on WAY too many fucking pills.
ada1981 8y ago
Is it considered insider trading to short a competitor before making an announcement you suspect will impact them?

576 points by dogichow 8y ago

As an early adopter of PillPack I can say that it is awesome. Not only are the packs very convenient (no more bottles, knowing when you forgot to take drugs) but the customer service is the best I've ever experienced. I had tried to use the mail-order drugs provided by insurance companies and they were a disaster. I couldn't find out what was coming when. Drugs would seemingly-randomly show up in my mailbox.

charleyma 8y ago

Meanwhile, CVS + Walgreens lost $6B in market cap on the news Amazon is moving directly into pharmacy space. It's crazy how competitive Wall Street views Amazon moving into a market; have there been examples of Amazon making a large purchase/move but completely failing? (sure there are, just not coming me off the top of my head)

elvirs 8y ago
this happens all the time. wall street makes money from stocks going up and down, they are designed to react to anything by sending stocks up or down. you can confidently buy some CVS Walgreens stock because I bet that stock is climbing back up within weeks
- xkjkls 8y ago
  I'm pretty sure the investors on Wall Street are far more sophisticated than just your "confidence".
chrischen 8y ago
Fire phone. Though I'm not sure if it was a purchase.
tetrep 8y ago
https://en.wikipedia.org/wiki/Fire_Phone https://en.wikipedia.org/wiki/Fire_Phone
- deleted 8y ago
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Nav_Panel 8y ago
Seems like in any market where Amazon can reasonably compete with a brick & mortar, Amazon will win... Consider how expensive real estate is these days, especially in urban areas (and how much "millennials" like delivery). It's a solid formula.
- njarboe 8y ago
  And they have a large brick & mortar presence with Whole Foods.
- jburwell 8y ago
  It's not just millenials in this case. I am an GenX-er with a wife and two kids. We are planning to switch to a mail order pharmacy (Pill Pack or Costco -- dependent on cost) in the near future. My wife, one of our daughters, and our dog (on a human med) taking regular meds. Even being a 5 minute drive from a brick and mortar pharmacy, and it is still a PIA. None of the scripts are on the same schedule so we make multiple trips. Inevitably, you get in line behind someone with a refill or insurance issue turning a quick pick into a 20 minute wait. A service that syncs up script refill schedules and works with doctors and insurance companies on refills renewals is a massive time saver and stress reducer.
- jklein11 8y ago
  But think about how much it costs to have the item physically delivered. There is no way that Amazon can make money on a $10 item that they need to deliver in a two day time frame.
blowski 8y ago
They invested $175M in LivingSocial, rebranded it "Amazon Local", then killed it off.
- pseudalopex 8y ago
  Amazon owned part of LivingSocial and also operated Amazon Local. LivingSocial eventually sold to Groupon.
  - blowski 8y ago
    Ah thanks for the correction
mtmail 8y ago
1999 Amazon when after Ebay with Amazon Auctions, about the same time Amazon zShops (now Marketplace) started. Back then a big bet in terms of money and resources that failed. https://glinden.blogspot.com/2006/04/early-amazon-auctions.html https://glinden.blogspot.com/2006/04/early-amazon-auctions.h...
simonsarris 8y ago
All the time. They tried to make a move into retail registers to compete with Square, and failed. They shuttered Amazon register in 2015: https://bits.blogs.nytimes.com/2015/10/30/amazon-shutting-down-its-register-credit-card-processor/ https://bits.blogs.nytimes.com/2015/10/30/amazon-shutting-do... They tried to take on Etsy with Amazon Handmade which bombed Etsy stock, but Handmade has gone pretty much nowhere, except some re-branding this year. People just forget Amazon's failed ventures, even fairly high profile ones, because there are so many, and the hits sometimes so large (like AWS). Quoting myself from April: > Amazon's ethos of "Announce fast, Release fast, if it fails, oh well" is intentional. From Bezos' point of view, this is actually a feature. In a shareholder letter in 2016, he called Amazon "The best place in the world to fail." He wants lots of teams working on lots of products, and if some of them don't pan out, that's OK. This has lead to a lot of successes, but also a number of small headaches for consumers who use products that are quickly discontinued and (charitably) forgotten.
- cabaalis 8y ago
  > They tried to take on Etsy with Amazon Handmade which bombed Etsy stock, but Handmade has gone pretty much nowhere, except some re-branding this year. Is severely damaging another online vendor really a failure for Amazon? It seems to me at that level, revenue from a venture is not always the only measure of success.
  - simonsarris 8y ago
    I had wondered that. Disclaimer, I'm long SQ. If you're following AMZN, SQ, or PYPL, you probably saw the headlines back in April: Amazon's Next Mission: Using Alexa to Help You Pay Friends Firm looks to make voice commands the next wave of commerce SQ and PYPL took a small dive on this news, even though at face value, its quite silly. Amazon would probably have a much better time trying to buy PayPal for Venmo or Square for Cash App but also to compete in the small-biz transaction field that Amazon tried and gave up on. Building out such a service based on Alexa users is wacky, and there doesn't seem to be a pressing need to let loose your wallet via voice. Personally, I think it's somewhat unlikely that AMZN would acquire PYPL due to a clash of cultures when it comes to customer service. (Amazon's: Very good. PayPal's: Legendarily evil). This reputation may also be the reason PayPal has kept their own name off of their Venmo acquisition product until very recently. I think there is a very slight chance that AMZN would try to acquire SQ. It would allow them to really break into small-vendor retail where they have failed with homegrown solutions before, and give them instant access to a growing P2P transaction market. Everybody loves to speculate about such acquisitions, though. ...But it would certainly be funny if the only reason Amazon made that press release was to butter up one of those two companies for acquisition, either by decreasing their share value or exerting pressure on them internally to agree to a deal before they face Amazon's competition.
jdhn 8y ago
CVS is down 8% right now, Walgreens is down 9%, and Rite Aid is down 10%. Investors are very nervous right now.
- hahnpv 8y ago
  Short term voting machine, long term weighting machine
- brianbreslin 8y ago
  I made a small bet earlier in the year thinking AMZN would buy Rite Aid. ah well.
ProAm 8y ago
No different than when Garmin's stock collapsed when Google announced free Maps/Navigation [1][2]. It's just the market reacting to supply and demand. [1] http://www.macnn.com/articles/09/10/28/google.maps.helps.gps.maker.stock.crash http://www.macnn.com/articles/09/10/28/google.maps.helps.gps... [2] http://www.businessinsider.com/googles-free-gps-service-crushes-garmin-tomtom-shares-2009-10 http://www.businessinsider.com/googles-free-gps-service-crus...
- atourgates 8y ago
  And caused a sea change for the industry and Garmin's business model. Garmin's automotive segment revenue has dropped from $2.5-billion in 2008, to $700-million in 2017. [1] They've been able to largely make up for it with revenue from other sources, [2] (mostly outdoor/fitness) [3], but I'm sure that shift and innovation was driven by the event you mentioned. [1]https://www.statista.com/statistics/217901/net-sales-in-the-automotive-segment-of-garmin-since-2008/ https://www.statista.com/statistics/217901/net-sales-in-the-... [2]https://www.statista.com/statistics/217907/net-sales-of-garmin-since-2009-by-quarter/ https://www.statista.com/statistics/217907/net-sales-of-garm... [3] https://www.statista.com/statistics/217905/revenue-distribution-of-garmin-by-segment/ https://www.statista.com/statistics/217905/revenue-distribut...
  - pm90 8y ago
    Wow those are staggering numbers! Props to Garmin for surviving a 60% reduction in revenue... I would've expected the company to just fold after that kind of loss.
  - jedberg 8y ago
    And most of that revenue surprises me. My car has a Garmin system built in (Honda). I never use it. I just connect my smartphone with CarPlay and use Waze (which will be even easier in September when it will show on the main touchscreen). So in my case, I paid money to Honda who in turn paid it to Garmin for something I'll never use, just so they can say it "comes with Navigation". I wonder how long that will last before no one cares if a car comes with navigation. I've already seen high end cars being sold without navigation, and just marketed as "smartphone ready". I suspect in a few years either all the cars will be sold that way, or they will all be self driving and get their navigation elsewhere.
rabidonrails 8y ago
Remember the fire phone? Neither does anyone else.
prostoalex 8y ago
The target market is dominated by seniors, who no longer have to drive to a local pharmacy and hang around the store while waiting for the subscription to be fulfilled. I am frankly surprised no dominant online player has emerged yet. Perhaps the shipping costs were a constraint?
- petra 8y ago
  True, maybe shipping was a constraint. can any random guy ship drugs ? isn't some special supply chain required ? Another guess is that changing habits(especially since buying drugs is an infrequent event, and that we're dealing with seniors) and creating trust we're other reasons.
  - Bartweiss 8y ago
    PillPack is basically a supply chain company - it's not an easy field to get into. I don't know if "who can ship these" is a big hurdle, though. Possibly a bigger issue is "doctors and patients are used to calling prescriptions in to pharmacies". But the main issue with drug delivery is the need for reliability; you can't have somebody's heart medication ship out late or get lost in transit, basically ever. And if you change offerings or go out of stock on specific products (which most retailers do often), you'll quickly be seen as an unreliable way to get any kind of regular medication. Plus, you can't let any fakes or low-quality products into your supply chain - so sourcing new suppliers is hard, but running out of suppliers for any single product is a crisis. So being an online seller for use-as-needed prescription meds might be easy, but the bulk of the money is in people taking drugs daily, and that stuff is damned hard to offer.
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- Bartweiss 8y ago
  Actual shipping costs aside, being a delivery channel is way harder for drugs than for most other things. Amazon is reliable, sure, but what do they have - 99.9% fulfillment, 99% on time, 99% with authentic products, 97% of listed products in stock? Those are guesses, but apply those numbers to delivering vital daily medicines and the problem becomes pretty obvious. Keeping in-stock rates high and "on time with authentic products" rates near 100% is not an easy task. It's not something pharmacies do perfectly either, but their shortages are generally at a store level rather than national, and they're not asking people to completely switch delivery mechanism to trust a space with online one provider.
xkjkls 8y ago
They tried a travel site once; they tried to sell insurance once; they tried to make a phone once; etc. They fail a lot of the time, but sometimes even when they do, it's a kick in the ass to some of the other competitors in the field, which causes them to depress their margins. So sometimes, even if Amazon's presence in the market fizzles out, they end up still reducing other's prospects.
ianamartin 8y ago
Phones.
deleted 8y ago
[deleted]

rocketpastsix 8y ago

Just another step in dominance for Amazon. Pretty soon you will be able to upload your prescriptions to Amazon and Prime Now will deliver within an hour, for $8.99

throwaway5752 8y ago
Realistically, CVS/Walgreens will hire lobbyists or member of the Trump circle and the president will tweet some bellicose messages about WaPo and Bezos that will result in antitrust action. This isn't the same country as it was 3 years ago. Amazon is playing with fire a bit here. This my last edit, but I'm definitely leaving this up so people can link back to it in 18-24 months. edit: Downvote me if you will, but it's public record that he thought it was perfectly fine to threaten a small restaurant (https://twitter.com/realDonaldTrump/status/1011212766487728133 https://twitter.com/realDonaldTrump/status/10112127664877281...), German car co's (https://twitter.com/realDonaldTrump/status/1010166772912320513 https://twitter.com/realDonaldTrump/status/10101667729123205...), Harley Davidson (https://twitter.com/realDonaldTrump/status/1011584315040419840 https://twitter.com/realDonaldTrump/status/10115843150404198...), and (at prior points) Amazon (https://twitter.com/realDonaldTrump/status/979326715272065024 https://twitter.com/realDonaldTrump/status/97932671527206502...). Countries and companies that have made policy decisions favorable to his family have gotten favorable treatment (KSA, China, Russia, DPRK), and those that have done otherwise (Qatar, AT&T/Time Warner, NFL) have suffered tangible repercussions.
- UnpossibleJim 8y ago
  How has this not been a thing since Reaganomics became standard policy for the last 6 administrations?
  - mrguyorama 8y ago
    I think he is specifically calling out the "tweeting" portion. IE, yes, companies have been lobbying to block their competitors for a while, but it's a fairly recent trend that all you have to do now is tell Trump he's the best and he will put out a twitter hit campaign against your competitors

sidcool 8y ago

This is huge. If I were into pharma business I would be very worried for my business.

adventured 8y ago
It's not huge. Walmart, which is even more competitive on pricing in retail than Amazon, entered the pharma prescription business many years ago. They deployed pharmacies to over three thousand physical stores and are the third or fourth largest pharmacy in the US. Amazon will have no greater impact than what Walmart did. How did Walmart impact CVS and Walgreens? Both continued getting larger. Maybe Amazon will drain some or most of the remaining growth in the segment by taking a slice of market share. More likely it'll just end up being an expensive, terrible business that struggles, like most of Amazon's ventures (they fail far more often than they succeed).

tombrossman 8y ago

This is interesting because Amazon isn't exactly known for supply chain integrity. Who here hasn't received fakes from Amazon? If you rely on a specific medication for your health, is Amazon a brand you trust to deliver it? How long until they start commingling pills and shipping random counterfeit/fake product to users? Hope it never happens but if they do with pharmaceuticals what they did with everything else they sell, it's only a matter of time before users are physically harmed. Let's be optimistic though, I hope this helps them finally get their shit together and control the rampant counterfeiting going on right under their nose.

Texasian 8y ago
Maybe this is related to Amazon's health venture? Both it and Pillpack are based in Boston after all.
- xkjkls 8y ago
  Possibly, CVS has a program which uses it's big discounts it gets on the drugs it sells in stores to sell them to employees for their health care needs: https://www.benefitnews.com/news/cvs-e-prescription-program-aims-to-help-employees-pay-less-for-medications https://www.benefitnews.com/news/cvs-e-prescription-program-...
protonimitate 8y ago
I understand the fear, but I don't think fake medicine is as big of an issue as fake market place items. PillPack already has an established distribution network and prescription delivery licensing in 50 states. I don't know for certain, but I would assume that fake prescription medicine is a much bigger risk and would threaten the operation more than, say, fake batteries.
- Aloha 8y ago
  It's likely they'll integrate on the ecommerce side of things, not on the supply chain side anyhow - the economy of scale that amazon has for shipping will be beneficial.

yohann305 8y ago

i see a lot of comments here of people worrying about counterfeit pills distributed on Amazon. A counterfeit drug in USA is a ticket straight to jail, but a counterfeit mug or yoga mat isn't such a big deal. I wouldn't worry about it so much especially because it's not an open marketplace since Amazon will use Pillback as the distributor

chrisper 8y ago
I think what we will see is AmazonBasics Aspirin and stuff like that. They are usually not fake.
c3534l 8y ago
People have some very naive views about how one of the most regulated industries in the world operates. A big pharmacy can't just buy drugs from a random internet source and give it to you based on how many users gave that seller positive feedback. I don't know how they think the pharmaceutical industry works in the US, but the idea that Amazon is going to start selling fake medicine is absurd.

jtchang 8y ago

Hopefully Amazon will be able to get rid of express scripts. They are the ultimate middleman sucking both pharmaceutical companies and consumers dry.

eurticket 8y ago
This does look like a death blow from multiple angles for ES. I think ES does provide a service that people want regardless if it hurts Pharmacies and it doesn't hurt consumers if they want to pay for the service; but maybe it affects drug prices in other ways? If the Cigna deal fails to go through they both owe some billions, coupled with Amazon in their space, ES looks doomed.
- shawn-butler 8y ago
  If Cigna's deal to acquire Express Scripts is terminated, either party could owe a fee of either $2.1 billion or $1.6 billion depending on the reason for the breakup, according to the filing.
supertrope 8y ago
Why are you sympathizing with pharmaceutical megacorporations that are able to raise the price of medications faster than inflation (e.g. 8%)?

rglover 8y ago

Captain Bezos takes us one step closer...https://www.youtube.com/watch?v=s-kdRdzxdZQ https://www.youtube.com/watch?v=s-kdRdzxdZQ

hendersoon 8y ago

Pillpack is a very useful service, particularly for people who take multiple medications. You get a little pack with the date printed on it so you never have that "did I take my pills this morning?" question. Their pricing is fine, and delivery is always on-time. Only problem I've seen is that they often (and I mean OFTEN) forget to apply medication savings cards, which adds up to quite a lot of money. I had to complain about this eight or nine times and ultimately escalated to one of their founders, a guy by the name of Eliot, to get this addressed. However, they may have fixed the problem as they haven't overcharged me so far in 2018. Prices are set by insurance and shipping is already free so I can't see how Amazon would improve on that. I imagine their margins are razor-thin, but it's pretty clear this sort of service will be how everybody gets their medicine in the next couple of years so the volume makes sense for Amazon.

kolbe 8y ago

The cumulative loss to CVS's and Walgreens's market caps has been about $12b. If Amazon had wanted to, they likely could have made more from the destruction of value to those companies than they paid to buy PillPack. I wonder what other industries out there can be arbitraged like this. I bet Amazon could shave well over $10b of market cap off of BKNG if they made the right strategic investment.

beagle3 8y ago
IANAL but I suspect it is actually legal for Amazon to short CVS+Walgreen in this case: Don't "inside information" trading laws apply only to the specific company about which information is available?
- kolbe 8y ago
  Even though insider trading laws can be quite nuanced, this is 100% legal.
- CGamesPlay 8y ago
  Doesn't the person on the other end of the short sue Amazon for having insider information material to the value of CVS+Walgreens? Or if not "insider trading", then "market manipulation"?
  - beagle3 8y ago
    Insider information is not well defined, but I don't believe that it covers this case (then again, IANAL). "Market manipulation" is dissemination of false information or demand with the express permission of profiting. But there was no false information or demand here.

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harshaw 8y ago

I interviewed at Pillpack years ago and was very impressed but didn't get the gig. They seemed to be solving a great problem for customers using multiple medicines. I am not sure the solution works well for the millions of us taking one pill every night, e.g the "pillpack" is wasteful. It also doesn't address this really annoying problem I have getting my daughter's ADD meds. These require a paper prescription that must be hand couriered to the local CVS. A giant PITA.

cabaalis 8y ago
I'm curious if you know why the ADD meds must be hand-delivered when government is actively incentivising e-prescribing among providers?
- mikeatlas 8y ago
  Controlled substance and cannot be prescribed more than 1mo supply at a time.
  - nickthegreek 8y ago
    It is a huge pain. Even if your prescriber gives you 3 prescriptions (1 month each, which I think is the maximum amount of time for a controlled substance in a single prescription), the entity that is fulfilling that order is not allowed to hold onto the other 2 for future fulfillment.
    - racecar789 8y ago
      Yeah the doc can put a "do not fill before [date]" and schedule scripts out for three months. Both CVS and Rite-Aid have an arcane system where controlled prescriptions are kept "offline". Their websites will not show the scripts as available to refill even if the doc has prescribed ahead of time. So one has to call to confirm the script was received, then call every month a refill is needed. But even worse...Rite-Aid requires a mandatory 30 day wait (per 30 day script). So that means on the day of refill...one needs to rush over early in the morning to get the refill, otherwise will risk missing a dose. CVS is a little better, allowing a 3-5 day early fill. But they also have their secret "offline" system for controlled substances. It's still a royal pain. So for Amazon...very little effort is required to succeed...simply show scripts that the doctor has sent over on their website...and offer a 2-5 day early fill....CVS/Rite-Aid won't stand a chance....

Molaxx 8y ago

The issue isn't fakes, it's the fact over medication is a real problem. Thank heavens that where I live drug advertising is illegal. After a visit to the US and encountering the brainwash machine of drug companies I realized just how important this law is.

lovetrump 8y ago
at least they have to list all the side-effects in their ads, but it is still crazy...
taf2 8y ago
Dont worry the side effects include certain death you’ll be super happy on this pill!

wjp3 8y ago

Maybe they can bring reliability, accuracy, and better customer service - because my experience with PillPack was terrible. Dropped them after a little over a year.

egyptiankarim 8y ago

I wonder if Amazon hopes to eventually get into manufacturing of pharmaceuticals. How long before we start to see AmazonBasics versions of Aspirin?

supertrope 8y ago
That doesn't seem especially profitable nor a core competency of AMZN. When you see a store branded bottle of ibuprofen, it's just a re-label of their contract manufacturer's pills.
- upvotinglurker 8y ago
  Yep. The AmazonBasics brand of aspirin may appear, but it will just be putting their label on the product manufactured by the companies already specialized to manufacture it (as is probably true with a lot of existing AmazonBasics products).
AtTheLast 8y ago
Don't they already do that with the basic care line of products.

LinuxBender 8y ago

Will this also expand Amazon's catalog of non-prescription supplements, such as vitamins, amino acids, co-enzymes, probiotics, etc.. ?

mrfusion 8y ago

Just an FYI. I measured the inside temp of my mailbox in August’s once and it was 150 degrees. You want to be careful getting medications in the mail.

jonknee 8y ago
How do you think the medications get to your local pharmacy?
- ceejayoz 8y ago
  Via climate controlled aircraft, distribution facilities, and relatively well ventilated delivery trucks? No step in the retail pharmacy supply chain involves routinely putting it in a small black box sitting out in the sun until you get home from work in the evening.
  - notyourwork 8y ago
    Perhaps in long term Amazon drones with climate controlled container could drop the medicine off.
    - jonknee 8y ago
      Or they can just deliver it like they do now without issue.
  - Merad 8y ago
    I’d be utterly shocked if you’re correct. Controlled substances most likely do get some kind of kind of courier delivery, but there’s no reason to do it for anything else. If it needs to stay cold you slap in an insulated box with ice packs. I’ve gotten deliveries before from Blue Apron and Omaha Steaks. Believe me, they have no problem keeping things cold.
    - ceejayoz 8y ago
      You seem to think I'm describing some special courier service. I'm not. I'm describing the standard USPS/UPS/FedEx experience all packages get, which is indeed how most of the stuff a retail pharmacy gets will be shipped. The parent's concern with direct-to-home delivery is valid - the inside of an in-sun mailbox on a 90 degree day is going to well exceed safe thresholds for many medications in a way the rest of the shipping chain won't.

seibelj 8y ago

Congrats to Techstars Boston and the first unicorn exit of a Techstars company! Awesome news

finnthehuman 8y ago

Large parts of PillPack were being mismanaged into the ground, I trust Amazon can fix them but at the same time my first reaction to the news was to text my non-programmer-or-management friends there about when they’re quitting. If Amazon’s warehouses or Whole Foods are any indication of how they’ll approach the unavoidable human work involved at a pharmacy, I have serious doubts about the quality of service. And pill pack is already in a pretty sorry state.

cflewis 8y ago
What do you think were mismanaged? I've used PillPack for years and I've been very happy.
zavi 8y ago
What unavoidable human work at pharmacy? Authenticate patients and ship them prescriptions. Even CVS is doing it now.
- djrogers 8y ago
  GP is likely referring to the requirement for humans to count and verify the packs of pills. FDA rules don't allow all of that to be automated away.
- finnthehuman 8y ago
  You know a pharmacy does more to fill a prescription than just count out pills on a slip of paper, right? How many pharmacists and pharm techs can be automated away by amazon that pillpack hasn’t already? And this is just a rhetorical question, neither of us are really qualified to address all the tasks to be done, nor current automation levels.

vedtopkar 8y ago

PillPack and other services like it can be life-saving. I'm only a second year medical student and I already can't count the number of conversations I've had with (especially elderly) patients about concerns regarding med adherence when burdened with a large number of prescriptions.

deleted 8y ago

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duxup 8y ago

PillPack sounds like the name of a black market drug company.... interesting name.

upvotinglurker 8y ago
In what way? And isn't "black market company" an oxymoron?

unixhero 8y ago

Paul Leroux called, he wants his ebiz back! ;)

hnburnsy 8y ago

Hope this is not redundant, but I believe that this deal gives Amazon a license to sell drugs in all 50 states.

hnburnsy 8y ago
Just heard it is 49 states as PillPack is not in HI. Edit, Adding source: https://www.pillpack.com/questions/can-you-ship-prescriptions-to-my-state https://www.pillpack.com/questions/can-you-ship-prescription...

Rotten194 8y ago

I used a mail order prescription service for a while (ExpressScripts). It was awful. They routinely lost, failed to ship, or double-shipped packages, and I got multiple bottles of pills that had expired due to being left in the heat. I, personally, will never trust mail order prescriptions again.

whoisjuan 8y ago
You're judging all the category by the performance of a single provider. I understand that, but I wouldn't discard the helpfulness of this concept just by your experience with one vendor. That's like not driving a car anymore because you had a bad experience with a particular brand.
djrogers 8y ago
Curious - how do you know said drugs had 'expired'?

ck2 8y ago

ah the power of extracting money from health insurance if people were paying out of pocket these kinds of markup could not survive fun fact: thanks to lobbyists and congress, it is illegal under federal law for a pharmacist to voluntarily tell you it cheaper to pay cash than use your insurance co-pay, you have to know to ask

supertrope 8y ago
Which law? Plenty of medical workers will tell you to take advantage of $4/month generic deals, especially if a significant proportion of patient populations is disadvantaged.

c3534l 8y ago

Pharmacies and benefit management companies have become very consolidated in recent years. And from what I've seen (which I'll have to be cryptic about since I don't want to accidentally reveal personal information about myself or anyone I know), it's not been to the benefit of consumers. Big evil companies that make money by screwing over sick people have been doing the 80s slash-and-burn consolidation thing where good companies are bought, existing customers are screwed over, and some small fraction of the company is absorbed into the greater machine. Buy a good company, deny people their medication, then make money off the difference until the customers leave for another company, then finally buy that one and repeat the cycle. This means getting in there is going to be very profitable, and if amazon can get in there are use its existing scale they can get quite rich. There's now three benefit management companies that are in charge of altruistically deciding what medications you can afford. On the one hand, Amazon breaking up this pathological oligopoly would be good for consumers, but if it's really a market structure thing we run the risk of there still being on three companies, but with Amazon instead of CVS, ExpressScripts, or United Health.

bugsense 8y ago

NURX (YC W16) is hiring by the way and it will be bigger than PillPack https://www.nurx.com/careers/ https://www.nurx.com/careers/ as it also prescribes

jaytaylor 8y ago

What about the environmental impact of the PillPack packaging strategy? http://assets.coolhunting.com/coolhunting/mt_asset_cache/2014/02/pillpack-1-thumb-620x508-75620.jpg http://assets.coolhunting.com/coolhunting/mt_asset_cache/201... (note: above image is of an already mostly empty PP box, they often come stuffed completely full) https://cdn.vox-cdn.com/thumbor/Jz4Xw7Xs-Fxnige1c2qnDlez-c0=/0x18:1100x751/1200x800/filters:focal(0x18:1100x751)/cdn.vox-cdn.com/assets/3968063/PillPack_Shipment.png https://cdn.vox-cdn.com/thumbor/Jz4Xw7Xs-Fxnige1c2qnDlez-c0=... I used PillPack a few years ago, and appreciated the reliable auto-refill (in fact their behavior was borderline insanely aggressive, which was fine by me). However, the volume of single-use plastic trash created by the way PillPack does packaging was downright excessive, and I felt so guilty about it I deactivated my account. It is less convenient now, but after going back to using typical mail-order and local B&M pharmacies in town the process results in approximately 10-20% of the amount of trash. See the images linked above as examples of what comes with each shipment - it's a plastic case full of little plastic pouches. There is 1 plastic pouch per dose of medication, and the plastic pouches are wound tightly inside. The volume of single-use plastic adds up rather quickly with PillPack. EDIT: Why all the downvotes? "Internet points" are unimportant, but it is curious and unsettling to see information about wasteful high-pollution corporate practices deep-sixed.

rrcaptain 8y ago
How many pills were you taking daily? The plastic waste of 4-5 pill bottles a month is quite large. But yes it is wasteful, just like the rest of for-profit healthcare.
- gehwartzen 8y ago
  I agree; The film pouches used by PillPack look to use significantly less plastic than those orange bottles.
petra 8y ago
There are probably ways to create a cleaner packaging system. But I'm not sure if the plastic problem (a huge one, and I really love nature) will be solved by individual action. In practice it would require laws, like the anti plastic bag law reduced demand by 70% in the Netherlands. Or technology, like a better bio-degradable plastic alternative.

nwcs 8y ago

There are some interesting security issues in the underlying systems that pharmacies like PillPack use. Here is a security advisory for PillPack from 2015: https://wwws.nightwatchcybersecurity.com/2015/04/30/advisory-pillpack-com-online-pharmacy/ https://wwws.nightwatchcybersecurity.com/2015/04/30/advisory... Basically the system that pharmacies used to transfer prescriptions isn't secure

dmix 8y ago
You're basing this off a 3yr old security review of a 2yr old startup (at the time: founded in 2013, reviewed in 2015)? Got anything more recent? 3yrs is a lifetime in startup years. Plus they now have plenty of money to hire the best security firms to pen test their systems, plug holes, and run a serious monitoring operation.
- nwcs 8y ago
  PillPack was founded in 2013: https://www.crunchbase.com/organization/pillpack https://www.crunchbase.com/organization/pillpack Also read the advisory - the issue is not with them - it's with the legacy prescription transfer systems they hook into. That is something they cannot hire someone to pentest without getting all of their competitors to agree.

dkresge 8y ago

Is the physical volume of the average pill predominantly "active ingredient"? If not, why not just "print" a single pill per customer-dose comprised of the prescribed constituents?

brandonmenc 8y ago
For some pills, not even close. This is why you can't just split any old pill and expect a partial dose.

ConcernedCoder 8y ago

Instantly licensed to sell/ship pharmaceuticals in the entire USA @ 20 million per state, not bad...

iamaelephant 8y ago

No company should be as big as Amazon is getting. I hope American regulators look seriously at breaking this company up.

swami26 8y ago

If people took their medication properly, healthcare costs would lower dramatically - on the tune of $300 billion. Pill pack's medication packaging increases proper medication use thereby lowering health costs. This purchase gives Amazon an entry into online medical pharmacy and a solid method to lower health costs. Further,Walgreens, CVS, and Walmart show that people are likely to buy lots of non-prescription products when getting their prescription so this purchase will likely boost Amazon's general commerce business as well. Link describing medication adherence potential health care savings. http://www.heart.org/HEARTORG/Conditions/More/ConsumerHealthCare/Medication-Adherence---Taking-Your-Meds-as-Directed_UCM_453329_Article.jsp#.WzWoO_ZFw2U http://www.heart.org/HEARTORG/Conditions/More/ConsumerHealth... Link describing medication adherence and Pill Pack. https://www.pillpack.com/healthcare-providers https://www.pillpack.com/healthcare-providers

zitterbewegung 8y ago

It seems that Amazon wants to become not only where you buy your stuff but also your Grocery and get Prescription drugs. I guess the play is that they are seeking out more places where to expand in a large way. Pharmacies are a big cash cow and entering in this space is not going to be trivial. On the other hand imagine what you could do with the data . Lets say you have clinical depression. Maybe it would recommend you a medical food such as Deplin or even the l-methylfoliate.

Cents 8y ago

This was so needed. Can they hasten the paper work doctors and insurance companies require? Amazon.com "Instant gratification at the speed of UPS." /g

ataturk 8y ago

I worked for a company that does online pharma. It was an incredibly annoying experience in a lot of ways to the regulatory headaches and the IT group's horrifying and irrational risk aversion--fear based programming is just no fun at all! Also, it was an all IBM shop, because some of the founders came from IBM and apparently still got kickbacks or something. What a shitty situation all around. Here's just one example: My team was not allowed to use Tomcat. We wanted to move to embedded Tomcat for our web apps because it was so much easier to deal with versus Websphere and all that thing's baggage. IBM's JVM sucks. IBM's RAD environment sucks. IBM's build tools (headless RAD) totally fucking sucks. It was thus impossible for such a small team to get anything done with all these headwinds, so all we wanted was to run Tomcat or Jetty which many of the company's vendors already supplied in-house applications ran on. The IT Dept. wanted to commission a multi-year study on Tomcat even though I showed them they are already running it inside their walls and have been for years! The place made utterly no sense to me. It was just job security for crumb bums, I guess. I finally gave up when they doubled down on mainframe purchases and waterfall methodology. How they remain in business is beyond me. Amazon will fucking stomp them into the mud, probably.

ExactActuation 8y ago

Just wanted to say it's pretty sad a company like PillPack even has to exist - it shows we're on WAY too many fucking pills.

ada1981 8y ago

Is it considered insider trading to short a competitor before making an announcement you suspect will impact them?