June 28th was a scary day for any shareholders of drugstore chains like Rite Aid (NYSE:RAD), CVS Health (NYSE:CVS), and Walgreens Boots Alliance(NASDAQ:WBA). What investor optimism might have previously existed for these companies eroded when news broke that Amazon (NASDAQ:AMZN) entered into a deal to buy tech startup PillPack in a transaction estimated to be around $1 billion in cash. This move creates a significant deal of risk for all of the major drugstore chains, but while Walgreens and CVS will be confronted with competitive pressures, the biggest hit could come to Rite Aid.

For a while now, Amazon has been interested in the pharmacy space. I have written articles in the past, like the one here, where I discussed the prospect of their move into the area. In particular, I was interested in the e-commerce giant buying up Rite Aid because of the low cost of real estate. The business’s decision to purchase Whole Foods earlier this year made me realize how attractive and, at the time, how likely I thought an Amazon buyout of Rite Aid to be.

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