Amazon Faces Challenges in Cracking $300 Billion Pharmacy Market

Amazon.com Inc. is buying its way into the pharmacy business. Now the question is, how big can it get?

PillPack, the startup pharmacy that Amazon is buying for about $1 billion, for now focuses on a narrow segment of patients who are on many different medications. It packages pills in individual packets that help people remember when to take their drugs every day, a common challenge for people taking, for example, drugs for diabetes, high cholesterol and blood pressure.

PillPack has the basic infrastructure that Amazon needs: mail-order pharmacy licenses in all 50 states, multiple pharmacy locations and a call ...