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Rivalry between Amazon and Walmart in pharmacy




Last week, Amazon upset the entire pharmaceutical industry by announcing its plans to acquire PillPack, a small startup that delivers prescription drugs to people taking multiple medications.

Among the companies that were hit: the chief competitor Walmart, who lost around $ 3 billion market capitalization after the deal was announced.

Walmart had offered $ 700 million for PillPack, but dragged on CNBC, according to regulatory concerns ago. Amazon stepped in and offered a bid of just under $ 1 billion.

The stock decline following the acquisition of PillPack by Walmart shows how strained the long-smoldering rivalry between Amazon and Walmart has become, especially with respect to the older population.

An aging population

The US population is aging. By the year 2050, the number of over-65s is expected to be twice as high as in 201

2.

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An aging population means an increase in health problems and chronic diseases such as heart disease, neurodegenerative diseases and cancer can be expensive to manage. It also provides a business opportunity for those companies that are best able to meet the health needs of this growing population.

PillPack, with its focus on patients on a range of prescription drugs, serves precisely this aging population, and the bidding war over it suggests it's a key area for Amazon and Walmart.

Walmart historically had an interest in the Medicare population. For example, Humana and Walmart have a co-branded Medicare drug plan and an initiative to provide coupons for healthy foods, and there were rumors that Walmart is considering buying Humana.

The aging population is one of the few health issues that Amazon executives have addressed. In February, Babak Parviz, an Amazon vice president, said at an event that the elderly are something "that is very close to our hearts".

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The fight for PillPack is just the latest example of the growing rivalry between the two retailers. As Amazon continues to move offline and Walmart goes online, the two companies are starting to clash more frequently.

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Although Amazon eventually triumphed with PillPack, India faced a defeat at the beginning of the year over another acquisition target. In May, Walmart finally bought around 77 percent of the Indian e-commerce startup Flipkart for around $ 16 billion and beat Amazon, which had also submitted an offer for the company, according to Bloomberg.

The Flipkart deal gives Walmart a head start on Amazon in the fast-growing Indian market, where Amazon ranks second in e-commerce, followed by Flipkart.

Flipkart and PillPack, taken together, show a pattern of the two retail giants overtaking each other.

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