Amazon has been disrupting businesses from electronics to household staples and even package delivery.
The pact follows months of speculation about Amazon's plans to get into the pharmacy or drug-distribution business.
The firm says it is 'designed to provide the best possible customer experience in the US for people who take multiple daily prescriptions'. Terms of the deal were not disclosed, but Amazon referred to the deal as a "definitive merger agreement".
When the company reported quarterly earnings at 7 a.m. ET, investors apparently liked what they saw, and the stock rallied as much as 1.5%.
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After Thursday's losses, Walgreens is trading 18% lower for the year.
Last week, Amazon, JPMorgan Chase and Berkshire Hathaway announced Boston doctor Atul Gawande as the chief executive of the companies' new health care venture, which will be based in Boston. Other same-store sales slid 5.2%. It has also developed pharmacy software that helps coordinate refills, makes sure the shipments are on time, and provides an online dashboard for patients.
Amazon's purchase of an online chemist that opens an immediate nationwide drug network in the USA has shaved billions off the value of three major pharmacy chains. The deal is expected to close later this year.
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Echoing that sentiment, Morningstar senior analyst Vishnu Lekraj called the stock's tumble after the Amazon news a "huge overreaction", in an interview after the call.
"At this juncture we are not anxious about Amazon's entrance into the prescription market", Cantor Fitzgerald analyst Steven Halper said in a note. "Pharmacy networks are controlled by managed care companies and pharmacy benefit managers with captive mail order capabilities".
Terms were not disclosed on the deal for PillPack, an online pharmacy which operates in all 50 USA states and offers pre-sorted dose packaging and home delivery.
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