Shares of drugstore companies are tumbling Thursday after Amazon announced it signed an agreement to acquire online pharmacy PillPack.

Walgreens Boots Alliance stock plunged 9.7 percent, while CVS Health fell 9.3 percent and Rite Aid dropped 10 percent respectively.

PillPack is an online pharmacy that packages, organizes and delivers pre-sorted doses of medications. In November of last year, the CEO said it was on track to post more than $100 million in revenue for 2017.

“PillPack’s visionary team has a combination of deep pharmacy experience and a focus on technology,” Jeff Wilke, Amazon CEO Worldwide Consumer, said in a statement. “PillPack is meaningfully improving its customers’ lives, and we want to help them continue making it easy for people to save time, simplify their lives, and feel healthier. We’re excited to see what we can do together on behalf of customers over time.”

Investors have been concerned that Amazon would eventually disrupt the pharmacy business for a while. In May of last year, CNBC reported Amazon was hiring people to break into the multibillion dollar market. Later that year in October, the St. Louis Post-Dispatch reported that Amazon had received approval for wholesale pharmacy licenses in at least 12 states, a report that sent these same stocks reeling on the day. All three of the stocks – Walgreens, CVS and Rite Aid – are down more than 10 percent the last 12 months, in part because of this fear.

More than 4 billion prescriptions are ordered in the U.S. every year. An estimated $300 billion was spent on prescription drugs by patients, insurance companies and other parties in 2015.

The terms of the deal were not disclosed. The companies expect the deal to close during the second half of the year. PillPack raised $118 million from venture capital firms including CRV and Menlo Ventures.

-CNBC’s Christina Farr contributed to this report.

This is a developing story. Check back for updates.

Source: Tech CNBC
Walgreens, CVS shares tank after Amazon buys online pharmacy PillPack