Until now, one arena Amazon (NASDAQ: AMZN) has not ventured into is the prescription arena, but that will change soon. At the end of June, Amazon announced that it had agreed to purchase PillPack, an online pharmacy that sells pre-sorted doses of prescription medications through home delivery. CNBC reports the deal is valued at around $1 billion in cash. PillPack and Walmart had been in talks for months, but they had not agreed to a final offer when Amazon stepped in. Assuming the deal passes all regulatory hurdles, the deal is expected to close in the second half of 2018.

Licensed in all 50 states, PillPack is full-service pharmacy focused on providing a quality customer service experience to U.S. customers. Its target market is Americans with complex health conditions or who take multiple prescriptions daily. PillPack delivers those prescription medications in pre-dosed packs, along with related supplies, to make it easier for customers to remember to take their medications. The company also handles refills, renewals and shipping.

To ease some of the hassle of getting prescriptions filled, PillPak works directly with doctors and insurance companies to handle issues. The company does a holistic review of a patient’s medications, and they provide access to their pharmacists 24/7 to answer questions. PillPack does not charge a fee for their service.

“PillPack makes it simple for any customer to take the right medication at the right time, and feel healthier,” said TJ Parker, co-founder and CEO of PillPack, in a statement. “Together with Amazon, we are eager to continue working with partners across the healthcare industry to help people throughout the U.S. who can benefit from a better pharmacy experience.”

Jeff Wilke, Amazon CEO Worldwide Consumer, also commented on the deal.

“PillPack’s visionary team has a combination of deep pharmacy experience and a focus on technology,” said Wilke in a news release. “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.”

CNBC reporter Christina Farr speculates that Amazon may make prescription drugs available to Prime customers.

“Amazon tends to lie in wait until it’s the right time, and now seems like a good time, given all the interest in bringing down the cost of drugs,” Farr said in a recent report. “It’s a big policy topic right now, so Amazon was lying in wait and thinking ‘when do we make a big play?'”

Insider Take: 

It will be interesting to see how Amazon puts PillPack to work for it. Here are a few questions that come to mind: will Amazon rebrand PillPack? How soon will they integrate PillPack into the Amazon mail-order machine? Will mail-order prescriptions be available to Prime members only, or can non-members use the service? How will Amazon navigate the health care system and relationships with key stakeholders?

This deal is a departure for Amazon in terms of products and services, so how they integrate PillPack will be critical to the success of this venture. It is an opportunity to reach a new audience of potential Prime members, and to wade into health care waters, but it will require solid execution. On the PillPack side, it is a way for the company to expand its audience and to get solid financial backing for future growth.