Stoking fears that Amazon will disrupt pharmacies, a CVS legal filing is reportedly aiming to prevent an ex-executive from working at the eCommerce retailer’s recently-acquired subsidiary PillPack. Jefferies Analyst Brian Tanquilut notes that the filing claims that PillPack is seeking a move that would cut out pharmacy-benefit managers (PBMs) such as the one that CVS owns by dealing directly with employers and health plans, Barron’s reported.
Tanquilut wrote, “While investors have viewed PillPack as a risk factor for retail pharmacies… [the] lawsuit shows that PBMs are now also at risk of being disintermediated, especially if [Amazon’s] efforts to directly contract with large payers gains traction.” And, while a PillPack representative would not comment to the outlet, PillPack CEO TJ Parker said in remarks included in the note from Jefferies that were taken from a deposition, “We’ve explored a number of different things, as you can imagine, but no, there are no immediate plans.”
PillPack has reportedly been in direct talks with a large group of insurers per a CVS filing that the report from Jefferies noted. And Tanquilut points out that even though PillPack claims that it isn’t making a pharmacy-benefit manager of its own, direct dealings with insurers could bring similar impacts to the space.
The news comes after Amazon announced last June that it had inked a deal to acquire PillPack. In a press release at the time, Amazon said it was drawn to the firm as it is having a positive impact on the lives of patients. PillPack delivers medications in pre-sorted dose packaging, while it also coordinates refills as well as renewals and makes sure that shipments are sent on time.
Amazon CEO Worldwide Consumer Jeff Wilke said in the release at the time, “PillPack’s visionary team has a combination of deep pharmacy experience and a focus on technology.” Wilke continued, “PillPack is meaningfully improving its customers’ lives, and we want to help them continue making it easy for people to save time, simplify their lives, and feel healthier. We’re excited to see what we can do together on behalf of customers over time.”