It was May 2018, and PillPack CEO TJ Parker was in Seattle to meet with a small contingent from Amazon.
Suitors had been swarming around his online pharmacy, which was taking on CVS and Walgreens and growing rapidly in the process. Walmart was deep in talks with the Boston-based start-up, and pharmaceutical maker Novartis was also hovering.
But bankers from Frank Quattrone’s Qatalyst Partners suggested that Parker and co-founder and product chief Elliot Cohen fly across country for a meeting with one particular Amazon executive: Nader Kabbani. A 14-year company veteran and guest concert pianist with the Seattle Symphony who’d recently been named Amazon’s vice president of consumables, Kabbani shared Parker’s concern about the pharmacy industry and the dominant players’ inability or unwillingness to put the consumer first.
Eventually, Parker and Kabbani were the only ones doing the talking, as all the other participants faded into the background. And from there it didn’t take long for Parker to decide that the bidding had ended. He was selling the company to Amazon.
On June 28, Amazon announced that it was buying PillPack for an undisclosed sum (later revealed as $753 million), snapping up a company that delivers most of the medications consumers can get from their local drugstore packaged in convenient white packets so people will remember to take them, along with automatic refills and 24/7 customer support.
Shares of CVS, Walgreens and Rite Aid tumbled on concern that Amazon was further encroaching on their territory after already taking a huge chunk of the market for toiletries and household goods. In the press release, Jeff Wilke, the head of Amazon’s worldwide consumer business, said the companies would work together to help consumers “save time, simplify their lives and feel healthier.”
What Wilke didn’t say was that Parker, the son of a New Hampshire pharmacist, had plans to surpass $1 billion in revenue by 2020, or that PillPack would soon be negotiating with large insurers to get its service into the hands of many more people while aggressively building out its technology to serve them.
Almost 11 months later and about $100 million richer, Parker’s title is still PillPack CEO, and the only noticeable differences to the outside eye are that his website now says “an amazon company” under the logo and Amazon has a new landing page introducing Prime members to the service. Inside the company, Parker, a 33-year-old pharmacist turned internet entrepreneur, is the face of Amazon’s audacious plan to bust into a prescription drug market that to date has represented perhaps the largest and most glaring gap in its retail empire.
CNBC spoke to a dozen people close to the founders, including investors, friends and PillPack employees for this story, most of whom asked not to be named because of confidentiality agreements. PillPack declined to make Parker or Cohen available for an interview, and neither have spoken publicly since the deal was finalized. Amazon declined to comment and Kabbani didn’t respond to a request for comment.