Amazon adds new 'Amazon Pharmacy' branding to PillPack and promotes its CEO

Key Points
  • PillPack, the Internet pharmacy it acquired last year, has updated its logo to "PillPack by Amazon Pharmacy."
  • A PillPack spokesperson said the company would be notifying its customers in the coming weeks with labels and printed materials that include references to Amazon Pharmacy.
  • PIllPack's CEO TJ Parker recently got a promotion, officially making him an Amazon vice president.
Kyle Walsh | CNBC

PillPack, the Internet pharmacy that Amazon acquired in 2018, has updated its logo and other paperwork to include a new "Amazon Pharmacy" brand, and sources say its CEO has been promoted to vice president within Amazon.

Specifically, the group's branding has changed from "PillPack, an Amazon company" to "PillPack by Amazon Pharmacy." It's the first public reference to Amazon Pharmacy, an entity that many analysts expect will eventually do more than mail delivery of medicines through PillPack.

Today, PillPack specializes in fulfilling multiple prescriptions and mailing them to customers in clearly labeled packages so they remember to take their pills at the appropriate times. Its customers tend to be older and on multiple medications. But Amazon could enter other areas of the sector by serving patients who have acute medical needs, or by adding a pharmacy to its retail stores, including Whole Foods.

How Amazon could change the pharmacy business
How Amazon could change big pharma

The prescription drug market is worth more than $330 billion, making it a lucrative opportunity for Amazon along with its rivals including Walmart and Costco. These companies are all positioning themselves against traditional drug store chains, like CVS and Walgreens. Costco, as CNBC reported this month, is now piloting a mail delivery service with grocery delivery start-up Instacart, which offers both convenience and affordable prices to its members.

In addition to the logo change, PillPack also recently filed paperwork that adds "Amazon Pharmacy" to the licensed name of its pharmacy fulfillment centers in New York, Texas, Florida, Arizona and New Hampshire, a company spokesperson told CNBC. The company said that there won't be any service changes for existing or new customers, and that it will retain its own brand. But customers will be notified in the coming weeks with labels and printed materials that will include references to Amazon Pharmacy.

The company also updated its help center page with references to PillPack by Amazon Pharmacy.

A slow integration

Amazon doesn't have a template for how it treats its acquisitions. Some of its largest buys to date, like Zappos and Whole Foods, have continued to operate with their own leadership, culture and brand. Others, like the Middle Eastern e-commerce marketplace Souq, operated independently for a time before shuttering their own brand and fully integrating into the parent company.

So far, PillPack appears to be falling somewhere in the middle. It still has its own offices and retains its brand but is now altering its marketing materials to show that it's part of Amazon. Amazon has also been promoting PillPack to its customers with a recently-launched landing page to introduce Prime members to the service. By contrast, Zappos, the shoe brand that Amazon bought in 2009, doesn't even mention Amazon in its "About" page or terms of service.

"The change to the brand implies Amazon has greater ambition in pharmacy beyond the PillPack product," said pharmacy expert Stephen Buck, who has worked in the industry for more than a decade."

"Amazon Pharmacy could be a pharmacy that dispenses all kinds of packages and prescriptions," said Buck. "It could also become a marketplace of pharmacies."

Another signal of PillPack's growing importance: The company's CEO TJ Parker got a promotion over the summer after impressing high-ups with his pharmacy knowledge, three people familiar with the move told CNBC. These people requested anonymity discussing internal company matters.

Parker, a pharmacist by training, saw an opportunity to create an aspirational, design-focused brand in pharmacy that doesn't constantly remind people that they're sick.

Getting promoted to vice president is a big deal at the company and often involves a nod from Jeff Bezos, said the people. Parker, who was previously reporting to Amazon vice president Nader Kabbani, now reports to Doug Herrington, the company's senior vice president for North America. A PillPack spokesperson said that the company doesn't disclose details on its organizational structure, but that Parker is leading PillPack within Amazon.

PillPack is viewed internally as a desirable team to join, in part because it's a growing, revenue-generating business for the company. It is up against some entrenched competition, but isn't showing any signs of giving up or slowing down.

Since it joined Amazon, PillPack is now in talks with insurance companies to forge ahead with direct contracting deals, CNBC previously reported. It is also taking on incumbents in the space, including fighting a legal battle with Surescripts, the e-prescribing company, over a patient data dispute and faced off with CVS over an attempted hire. In recent months, it has expanded its team and currently has more than two-dozen openings across its various offices, including at a new pharmacy in Seattle, Washington near Amazon's headquarters.

PillPack isn't Amazon's only health-related bet. The company is also working on a primary care clinic for its own employees, called Amazon Care, and it is part of a joint initiative called Haven, with JP Morgan and Berkshire Hathaway, that aims to bring down health care costs and improve the quality of care.

Follow @CNBCtech on Twitter for the latest tech industry news.