Amazon takes first steps to expand PillPack online drug presence

Amazon is expanding its efforts to launch online pharmacy operations by focusing on PillPack, which it acquired this past summer, according to analysts at investment banking firm Jefferies.

Amazon is expanding its efforts to launch online pharmacy operations by focusing on PillPack, which it acquired this past summer, according to analysts at investment banking firm Jefferies. Amazon is looking to acquire licenses for PillPack to operate in more states beyond the ones that PillPack had at the time of the acquisition, said Jefferies analysts. "Our proprietary check of (Amazon's) moves in the pharmacy space indicates that the online retailer has finally made moves to expand PillPack, though the initial expansion phase appears focused on offering pharmacy services to Amazon employees in WA," Jefferies indicated in a recent briefing. However, the license approval process is time-consuming, and other pieces to facilitate growth in pharmacy services are not yet in place, noted Jefferies' Brian Tanquilut. Amazon has secured a license for Washington state, and it has two pending license applications in New Mexico and Indiana. Jefferies research also found new job postings for pharmacy technician, packaging, and shipping linked to PillPack's Phoenix facility. PillPack currently has five mail-order prescription facilities, versus 26 run by Caremark, 18 from Optum, and 15 operated by Express Scripts. "We don't believe Amazon is currently in the position to rollout a full-scale 'Prime Rx' offering near-term … There's still a heavy lift required (in terms of building and acquiring additional distribution capacity) until PillPack can sufficiently service an extremely large membership base such as Prime," which it estimates to have 85 million members, the analysts said.