Amazon buys PillPack, an online pharmacy, for just under $1B • Hacker News Board

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

#61

Post by thisisit » Thu, Jun 28, 2018, 3:59 PM UTC

cabaalis wrote: post #21

simonsarris wrote: post #17

Earlier quoted context omitted.

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-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 profi…

> 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.

> Is severely damaging another online vendor really a failure for Amazon?

Yes because while Etsy stock dropped by 60% to less than $10 it has recovered back 42 dollars about 3 years later.

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

#62

Post by petra » Thu, Jun 28, 2018, 4:01 PM UTC

tombrossman wrote: post #18

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…

Amazon was in negotiations with hospitals for doing their supply chain. That could be good branding.

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

#63

Post by jonknee » Thu, Jun 28, 2018, 4:01 PM UTC

tombrossman wrote: post #18

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…

They have lots of different businesses and associated supply chains, they're not going to have random 3rd parties selling prescriptions on Amazon like they do for many verticals.

There would be no reason to integrate prescriptions in with their warehouses, so I don't think one is going to change the other.

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

#64

Post by throwaway5752 » Thu, Jun 28, 2018, 4:02 PM UTC

tssva wrote: post #40

throwaway5752 wrote: post #4

Earlier quoted context omitted.

[flagged]

CVS owns the 2nd largest prescription benefit management provider and is purchasing the 5th largest health insurance provider. They will be able to use differing co-pay levels to drive pharmacy business. Walmart has been negotiating either a purchase or partnership with Humana. This may drive Walmart to be more agressive towards finalizing a deal or maybe even have them looking at a different potential target such as…

I remember all the way back to when Merck spun out Merck Medco, which Express Scripts acquired (by that time, renamed Medco Health Solutions) to become the largest. Amazon is a guppy in an ocean with this acquisition. And yet Bezos owns WaPo, which is the basis for my statement.

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

#65

Post by kolbe » Thu, Jun 28, 2018, 4:03 PM UTC

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.

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

#66

Post by GurnB » Thu, Jun 28, 2018, 4:04 PM UTC

skybrian wrote: post #30

tombrossman wrote: post #18

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…

Just as a data point, I don't believe I've gotten a fake from Amazon.

Try buying a PS4/PS3/Xbox controller. There is a good chance it is a good looking fake. Apple accessories are another hit or miss target.

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

#67

Post by [deleted] » Thu, Jun 28, 2018, 4:04 PM UTC

prostoalex wrote: post #48

charleyma wrote: post #2

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)

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?

[deleted]

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

#68

Post by [deleted] » Thu, Jun 28, 2018, 4:05 PM UTC

skybrian wrote: post #30

tombrossman wrote: post #18

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…

Just as a data point, I don't believe I've gotten a fake from Amazon.

[deleted]

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

#69

Post by Bartweiss » Thu, Jun 28, 2018, 4:06 PM UTC

petra wrote: post #55

prostoalex wrote: post #48

Earlier quoted context omitted.

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?

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.

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.

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

#70

Post by djrogers » Thu, Jun 28, 2018, 4:07 PM UTC

el_benhameen wrote: post #26

tombrossman wrote: post #18

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…

Man, yeah. I’ve stopped buying anything food-related from Amazon, and I’m very hesitant to use it for anything that will come into contact with me or my family. If they integrate PillPack’s supply chain with their own, I would be extremely unlikely to even consider the service.

Have you actually received fake food from amazon?