There's a reason shares of CVS, Walgreens, and Rite Aid were tumbling Thursday, and it can be summed up in one word: Amazon. The retailing behemoth made its first significant move into the pharmacy business by buying PillPack, an online company that ships medications to customers' homes, reports the Wall Street Journal. It's not clear yet what Amazon plans to do with the new business, including whether it will allow the firm to remain independent (as with shoe retailer Zappos) or turn it into the foundation of a bigger health-care push, reports CNNMoney. The big pharmacy chains have been bracing for Amazon's arrival, and this deal could "shake up the drugstore industry," per CNBC.
The CEO of Walgreens sought to reassure investors. "The pharmacy world is much more complex than just delivering certain pills or packages," says Stefano Pessina. "I strongly believe that the role of the physical pharmacy will continue to be very, very important in the future." The move comes after CVS announced a deal with the US Postal Service to deliver drugs to people's homes for $4.99, notes the Journal. And CVS' purchase of Aetna last year was seen as a pre-emptive strike against Amazon. (Read more Amazon stories.)