Amazon’s Acquisition of PillPack Signals Major Move in Pharmaceutical Industry

Amazon started out a little over two decades ago as a bookseller, eking out modest profits by selling literature. They’d buy for a dollar, sell for two. They’ve since grown rapidly, conquering every market they’ve ventured into: retail, cloud computing, digital media content, and more. 

It now appears that health care might be next.

Bloomberg reported that Amazon is spending a whopping $1 billion to buy PillPack, a Boston-based startup that will give Amazon the potential to immediately shake up the American health care system. The corporation will now have the means to quickly and efficiently distribute prescription drugs to anywhere in America. This makes for a huge development, considering that U.S. consumers spent $328.6 billion on such drugs in 2016. 

“This move signals just how big of a market opportunity there is to change the pharmacy landscape,” said Michael Rea, CEO of Rx Savings Solutions.

Lisa Bielamowicz, president of Gist Healthcare, added: “This provides an avenue for Amazon to disrupt major pharmacy chains the way that they’ve disrupted booksellers, pet supplies, clothing, and other big-box retailers.”

The deal is sure to bring disruption for retailers, suppliers, and middlemen across the prescription drug industry. CVS recorded $59.5 billion in such sales last year, while Walgreens had $57.8 billion. Amazon’s presence in the marketplace is almost certain to eat into those numbers.

Amazon CEO Jeff Bezos has been on a rampage invading new industries. A year ago, he purchased Whole Foods in an effort to take over the $800 billion grocery industry; before that, he moved into consumer electronics by releasing the Kindle e-reader and the Echo voice-controlled speaker. It appears that prescription drugs are next, and the stock prices of Walgreens and CVS are already plummeting in anticipation.

Bezos has made no secret of his opinion that the health care system is broken in the United States. He’s been vocal about rising costs, unnecessary complexity, and inconsistent health outcomes with prescription drugs. His hope is that Amazon’s business model can help streamline things. PillPack sells pre-sorted packets of prescription drugs and delivers them, and Amazon’s distribution network can make that process speedier and more cost-effective.

Could The Apple Watch Find Powerful New Medical Applications?

When the engineers at Apple were first developing the Apple Watch, a product that debuted in 2015, they envisioned it as a device with many medical applications. Steve Jobs himself, who succumbed to cancer in 2011, spent his final months encouraging Apple researchers to develop a noninvasive glucose reader for use by diabetics.

Such medical uses for wearable technology eventually fell by the wayside, as Apple’s developers decided that they either were unreliable, made the watch too bulky, or drained too much battery. However, the Apple Watch is becoming useful for medical purposes after all.

This is possible largely because of Apple’s announcement in September 2017 that the watch would no longer need to be tethered to a smartphone. Instead, the Apple Watch will function as a standalone device. This has led medical device manufacturers to tap into features of Apple wearables such as cellular connectivity to develop more advanced medical accessories. One key example is an electrocardiogram for monitoring heart activity, which makes it easier for people to manage chronic health conditions directly from their wrists.

“This is an important step in the evolution of wearables,” Tim Bajarin, president of research firm Creative Strategies, said in an interview with The New York Times. “The Apple Watch can now be on you all the time doing this type of medical monitoring.”

Apple has dominated the market for smartwatches over the last two years, but even the Apple Watch has struggled to become as popular as the company’s other mobile devices, such as the iPod, iPhone and iPad. The hope at Apple is that as the digital health revolution continues, and mobile health technology becomes more prominent, people will place more of a premium on having their own private medical accessories. 

We’ve already seen a couple of ideas for mobile medical applications take off in recent months. In November, AliveCor introduced a built-in electrocardiogram for the Apple Watch that will help users detect irregular heart activity. Additionally, Apple has continued to research the potential for a noninvasive continuous glucose reader for use by diabetics.

Surgical Robotics Market Is Growing Exponentially

A doctor performs minimally invasive robotic surgery using the da Vinci Surgical System.
Photo credit: Shutterstock

Medicine is becoming an increasingly technical field. Robots are assisting surgeons in performing complicated operations, strides are being made in 3-D printing (which could revolutionize organ transplants), and artificial intelligence is adding new efficiencies to the healthcare industry. But it’s the surgical robotics industry that seems poised for a huge break.

Research has indicated that the global surgical robotics market could reach a staggering $91.5 billion by 2025. Here are a few of the companies at the forefront of this rapidly growing industry.

Synaptive Medical

This Toronto-based company, founded in 2012, is best known for its BrightMatter™ surgical technology, which combines informatics, imaging, surgical planning, and surgical robots that feature advanced optics. Synaptive has received financial votes of confidence, too: in its most recent funding round, it received more than $900,000 from six anonymous sources. It also entered into a strategic partnership with private equity firm General Atlantic.

Commenting on the partnership, General Atlantic’s Alex Crisses said, “Synaptive marks the first investment by General Atlantic in the medical device sector, which speaks volumes to the attractive market opportunity we see in the healthcare technology industry.”

BrightMatter™ has been installed at top ranked facilities across the U.S., including Emory University Hospital, the Gates Vascular Institute, and Mount Sinai.

Intuitive Surgical

Creator of the da Vinci Surgical System, the most commonly known surgical robotics system, Intuitive Surgical raised $46 million in its IPO in 2000. Da Vinci was the first robotic surgical system cleared by the FDA for general laparoscopic surgery. The product features a magnified 3-D high-def vision system and tiny instruments that bend and rotate far more than the human hand is capable of doing. The surgeon is completely in control of the system at all times, so there’s no need to worry about having your gall bladder removed by a robot instead of a doctor.

However, in the past couple of years, Intuitive Surgical has gotten a serious competitor: Google and Johnson & Johnson have teamed up to “build a better robot.”

Verb Surgical

Intuitive’s biggest competitor was formed in December of 2015. It’s the offspring of a strategic partnership between Verily Life Sciences (formerly known as Google Life Sciences) and Ethicon, a medical device subsidiary of Johnson & Johnson. Verb is building a surgical robotics system that brings together the medical instrumentation technology developed by Ethicon and the “big data” and machine learning expertise of Google. The team’s goal has been to develop a digital surgical platform that will include robotics. The company claims its system will cost much less than Intuitive Surgical’s da Vinci.

According to Market Research Engine, the major drivers of the global surgical robotics market include introduction of technologically advanced systems, an increasing frequency of neurological disorders, growth in healthcare spending, and higher dexterity along with cost efficiency. However, safety concerns, a shortage of trained surgeons, and regulatory hurdles could harm the industry.

Despite the potential downsides, the future is looking bright for the companies building platforms enabling surgeons to enhance their skills with robotic technology.

CVS to Offer Prescription Drug Delivery

If CVS is your pharmacy, getting your medication just got easier.

CVS will begin offering next-day delivery for prescription meds starting in 2018, and some markets will even have the option of same-day delivery. The program will begin in CVS’s Manhattan locations next month (December 4). While delivery certainly makes life easier for everyone, the sick and the elderly stand to benefit greatly from this option.

“Our goal is to the meet the needs of all our customers wherever, however, and whenever they want,” said Helena Foulkes, president of CVS Pharmacy and executive vice president of CVS Health.

CEO Larry Merlo made the announcement during a conference call with analysts, citing a 2.7 percent loss in retail sales (which include prescriptions) in the third quarter, although its pharmacy services business—which offers drug benefits for both employers and insurers—had a significant increase in revenue. This leads most analysts to believe that CVS is worried that Amazon is going to steal its customer base and takeover the pharmaceutical sales industry.

Amazon has recently obtained multiple wholesale pharmacy licenses in 12 states. While the company has made no announcements on its intentions, those licenses will allow Amazon to sell prescriptions online. This news caused stocks for both CVS and Walgreens to fall, as investors worry Amazon will take away the pharmacies’ customers like it has with so many other industries. That’s enough to put CVS on alert, especially when customers are fans of convenience.

Last month it was reported that CVS was in talks to buy Aetna, one of the nation’s largest health insurance providers, which is another indicator that CVS is worried about the potential shakeup in the pharmaceutical industry. While Merlo did not mention this supposed acquisition to analysts, the rumors have been widely reported and are believed to be true.

As for the next-day delivery, CVS has not given any specifics on delivery options, partnerships and fees, but spokespeople for CVS have said that delivery fees will vary depending on location. Deliveries will also include a select offering of store merchandise.

Healthfundit: A Crowdfunding Platform for Biomedical Research

Have you ever wondered why it takes so long for vaccines, cures, and other pharmaceutical treatments to be developed? It’s because there’s a severe lack of funding for biomedical research. But an Alabama-based startup called Healthfundit has a solution, and it involves revolutionizing the way in which biomedical research is funded.

As it currently stands, most biomedical research projects are funded through the National Institutes of Health (NIH). However, over the past decade, research funding has decreased by a staggering 22%. To make matters worse, budget proposals for 2018 are set to reduce NIH funding by an additional 18%.

Rather than let biomedical research funding continue to decline, Healthfundit has proposed a new form of financial backing: crowdfunding. The company provides an online platform where visitors can donate to the projects they care most about.

Here’s how it works: Healthfundit accepts unfunded NIH grant proposals that rank in the top 30th percentile. Online community members then vote on their favorites. Projects and proposals that receive the highest interest from the community are selected to crowdfund. Healthfundit will assist in the crowdfunding process, which includes providing promotional materials.

Healthfundit co-founder and CEO Larry Lawal believes that this new approach to funding is necessary if we want to see advancements in healthcare. Currently, less than 1% of federal money is allocated to scientific initiatives, whereas nearly 54% of the U.S. budget is spent on the military.

“Research funding is broken and if we don’t reinvent research funding, our collective health will decline in the coming decades,” Lawal said in a 2014 Tedx Talk. “Much of the research avenue I pursued cannot be directly continued because of government funding cuts, and that is the shared story of countless researchers and academic centers across the U.S.”

For being in its beginning stages, Healthfundit is already off to an impressive start. The company has established a partnership with both the NIH and a Fortune 500 company. Given its potential, this is definitely a company that investors should keep their eye on.