Amazon's new pharmacy deal ruined a perfectly good earnings report for Walgreens

Amazon's new pharmacy deal ruined a perfectly good earnings report for Walgreens

Amazon's new pharmacy deal ruined a perfectly good earnings report for Walgreens

Watch out, CVS and Walgreens: Amazon on Thursday announced plans to acquire PillPack for an undisclosed sum.

PillPack supplies pre-sorted prescription drugs and other services for people who take multiple medications, a growing market as the USA population ages and requires treatment for multiple complex, chronic conditions.

Importantly for Amazon, PillPack already has mail-order pharmacy licenses in all 50 USA states, which could enable Amazon to expand quickly into the broader mail-order pharmacy business.

Amazon said Thursday that PillPack offers a combination of deep pharmacy experience and a focus on technology.

Walgreens Boots Alliance raised the lower end of its guidance for fiscal year 2018 by 5 cents per share and now expects adjusted EPS of $5.90-$6.05.

Of course, Amazon is in the midst of developing a joint healthcare venture in partnership with the CEOs of Berkshire Hathaway and JP Morgan Chase.

Amazon is buying online pharmacy PillPack, and the main pharmacy stocks are getting whacked.

When the company reported quarterly earnings at 7 a.m. ET, investors apparently liked what they saw, and the stock rallied as much as 1.5%.

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 handles refills and communicates directly with users' insurance and doctors.

Shares of CVS Health (CVS.N) were down almost 8 percent, while Walgreen Boots Alliance (WBA.O) fell 10 percent. Terms of the June 28 deal were not disclosed.

Shares of drug wholesalers McKesson Corp, Cardinal Health and AmerisourceBergen also fell sharply.

"When Amazon sneezes, everybody else catches a cold", said Joseph Feldman, an analyst with Telsey Advisory. The company sorts your pills by dose, including vitamins and over-the-counter medicine, into personalized daily packets and delivers everything right to your door each month.

"PillPack makes it simple for any customer to take the right medication at the right time, and feel healthier", said TJ Parker, co-founder and CEO of PillPack.

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