Health-Care Stocks Plunge After Amazon Buys Pharmacy Startup

Poised to disrupt industry

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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 a 9.4% decline in Walgreens Boots Alliance WBA, +0.54% shares, 13% drop in Rite Aid Corp. RAD, -11.11% shares, 9.2% drop in CVS Health Corp. CVS, -6.10% shares, 2.3% drop in Express Scripts Holding Co. ESRX, -1.42% shares, 5.8% drop in McKesson Corp. MCK, -6.12% shares, 5.3% drop in Cardinal Health CAH, -4.84% shares and 4% drop in AmerisourceBergen Corp. ABC, -4.14% shares.

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