Amazon.com announced it is buying small US online pharmacy PillPack. This move adds another retail string to Amazon's bow, and sees them move into direct competition with drugstore chains, drug distributors and pharmacy benefit managers.

The deal saw an immediate sell off of shares of possible rivals. PillPack supplies pre-sorted prescription drugs and other services to people who take multiple medications, a growing market as the U.S. population ages and requires treatment for multiple complex, chronic conditions.

Although PillPack expects sales to exceed only about $100 million this year, Amazon’s huge customer base and existing shipping infrastructure could allow the company to scale up quickly. Amazon could also negotiate directly with pharmaceutical companies, giving them the ability to offer cheap generic drugs. The value of the deal was not disclosed. Bloomberg reported it to be $1 billion, citing a person familiar with the matter.

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