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April 5, 2018

Walmart in talks to acquire pharmacy startup PillPack

Daily Briefing

    Walmart is reportedly in talks to acquire mail-order pharmacy startup PillPack for under $1 billion, according to two sources families with the discussions, CNBC reports.


    According to CNBC, PillPack organizes, packages, and distributes prescription drugs for its clients, including those with multiple chronic conditions, and boasts a "full-service" pharmacy that's open 24/7. The company has raised $118 million in funding from investors and reached over $100 million in revenue in 2017, CNBC reports.

    Tentative discussions, sources say

    Sources cautioned that the deal with PillPack is not final, CNBC reports, but that the two companies have been having discussions about a potential deal for months. The sources told CNBC that Walmart has mulled the possibility of acquiring several start-ups, and that Amazon had at one point courted PillPack as well.

    A Walmart spokesperson declined to address the news, stating, "We are often asked to speculate on possible acquisitions and we simply don't comment on those types of questions."

    Amazon could not be reached for comment by CNBC and PillPack declined comment.

    Walmart's continued push into health care

    According to CNBC, the discussions come amid separate reports of Walmart's potential merger with Humana. If both the Humana and PillPack deals were to go through, it would make Walmart a massive player in the health care industry, with digital and physical pharmacies, home health services, and health insurance all housed within one company, Axios reports.

    Experts in the health care industry have said the PillPack acquisition would be logical for Walmart and for Humana, as both organizations are seeking out how they can provide services for seniors with one or more medical conditions.

    Bob Kocher, a health investor with Venrock who had no inside knowledge of the potential deal, said that a company like PillPack would be "a huge differentiator for any pharmacy." He added, "Walmart is trying to offer a better e-commerce experience as a retailer, as well as on the health side with its pharmacies, and it wouldn't cost them that much to buy a company like PillPack" (Farr/Hirsch, CNBC, 4/2; Baker, "Vitals," Axios, 4/3; Mai, Pacific Business News, 4/2).

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