The inside story of why Amazon bought PillPack in its effort to crack the $500 billion prescription market

approaching $500 billion a year

What we know is that Amazon acquired an 800-plus person workforce and a high-growth, very low-margin business that, like a traditional retailer, uses the majority of its revenue to pay for inventory. We also know that Amazon has not only been continuously adding household products to its marketplace, but has also been establishing its own brands for things like batteries, toilet paper, light bulbs and towels.

"Amazon bought the one company in the space that all the PBMs and other pharmacy businesses were threatened by," said, a health-tech investor at Bain Capital Ventures. "The challenge is now they put a stake in the ground and the flag has been planted." The pharmacy business is in Parker's blood. Growing up, his dad owned a pharmacy in Concord, New Hampshire, where the younger Parker personally checked labels on pill bottles and delivered medicines to nursing homes and assisted living facilities.

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