Walmart is in discussions to acquire medication delivery service PillPack for “under $1 billion,” reports CNBC. CNBC’s sources said the deal isn’t final yet, but talks have been going on for months and Amazon was also a potential suitor for the startup, which delivers medications to tens of thousands of customers in the United States.
Launched in 2013, PillPack has raised $118 million in funding from investors including Accel Partners, Atlas Venture and CRV. PillPack doesn’t just fill prescriptions. It also helps patients manage their medications by sorting pills into packets for individual doses, automatically delivering refills to homes and providing 24/7 customer service, which is a major selling point for seniors and people with multiple conditions. Last year, PillPack also unveiled prescription management software called PharmacyOS which it described as “the first backend pharmacy system designed specifically for customers with complex medication regimes.”
Last November, co-founder and chief executive officer T.J. Parker, who trained as a pharmacist, said PillPack would do over $100 million revenue in 2017. It has a loyal customer base, who helped PillPack win a public relations battle in 2016 with Express Scripts, the country’s largest pharmacy-benefits manager. After Express Scripts cut off its partnership with PillPack, claiming that the company needed to be licensed as a mail-order operation instead of a retail pharmacy, PillPack said this would force it stop delivering to a third of its customers. It also accused Express Scripts, which runs its own home delivery service, of trying to block competition. Online outcry by customers, driven by a PillPack campaign, forced Express Scripts to back down.
Both Walmart and PillPack declined to comment on a potential acquisition to CNBC.
Amazon is said to be working on its own prescription delivery service, after launching a line of over-the-counter health products like allergy treatments. If its pharmacy business comes to fruition, that means Amazon will compete even more closely with Walmart, putting increasing pressure on the big-box store chain.
Walmart is also reportedly in talks to acquire health insurer Humana.