Amazon acquisition of online pharmacy startup PillPack sends health-care stocks into a nose dive

Amazon.com Inc. is buying the venture capital-backed startup PillPack, confirming the retail giant’s online pharmacy ambitions, which have hung over the U.S. health-care industry for over a year.

Advertised as “a new kind of pharmacy,” PillPack packages medications by dose and delivers them directly to patients, along with other products like vitamins, inhalers and testing supplies. The service is particularly geared toward those who must take several medications daily, including individuals with chronic conditions and seniors.

The Thursday announcement sent the stocks of other pharmacy chains, drug distributors, pharmacy-benefit managers and even health insurers tumbling on Thursday, triggering an 11% decline in Walgreens Boots Alliance WBA, -9.33% shares, 13% drop in Rite Aid Corp.

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