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Amazon's PillPack acquisition creates potential roadblock for Rite Aid-Albertsons deal

Amazon's recent $1 billion acquisition of PillPack may pose an issue for Albertsons' proposed acquisition of the remainder of Camp Hill, Pa.-based Rite Aid, Forbes reports.

Here are three things to know:

1. In a June 25 letter to shareholders, Rite Aid officials said the $24 billion deal would make the Boise, Idaho-based grocery chain and the pharmacy stronger, creating an "omni-channel platform" that may be able to take on Amazon. Rite Aid shareholders would own approximately 30 percent of the combined organization comprising 4,310 "pharmacy counters" nationwide, according to the report. Shareholders are set to cast their ballot on the fate of the transaction Aug. 9.

2. However, some experts believe Amazon's PillPack acquisition would lessen the number of Americans who visit traditional pharmacies run by the likes of Rite Aid, Walgreens and Walmart. The Albertsons deal also includes Rite Aid's pharmacy benefit manager, EnvisionRxOptions. Some experts believe Amazon needs a PBM of its own to be competitive in the industry.

"We think Amazon needs to buy a PBM (which is possible) to have a meaningful impact on market share," a Mizuho Securities analyst wrote in a report obtained by Forbes. "Although PillPack is a small player, it's probably safe to assume this acquisition is the first of many steps that Amazon will take to enter the pharmacy space."

3. A Rite Aid spokesperson declined to comment to Forbes about the Amazon-PillPack deal and referred to the company's shareholders letter for the "rationale of why shareholders should support the proposed merger," the report states.

To access the full report, click here.

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