leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. emily: i'm emily chang in san francisco and this is "bloomberg technology." coming up, amazon makes a $1 billion splash in health care. we will hear from an early investor and talk about how amazon is shaking up the industry. --s, president trump while the chairman's is the company's biggest threat is a possible trade war. and robots prepare for liftoff.

ibwhat -- what this means for the next generation of space travel. amazon is buying into the heart of the u.s. health care industry and shaking up the prescription drug machine. the company for $1 billion. news of the deal sent shockwaves through the industry were u.s. consumers spent $329 billion on retail sprinkler -- prescription drugs in 2016. latest in a series of big-name moves by amazon ceo --f these us jeff here to discuss we have bloomberg tech senior editor brad stone. have georgehone we

zachary. this is after months of amazon makingout moves. how much could this potentially shakeup? >> we heard that walmart was circling pillpack, and maybe george could tell us about why that didn't happen. was looking at taking pharmacy licenses in several states. now we know amazon outmaneuvered a major competitor and suddenly has mail delivery licenses in 50 states. amazon is almost instantly a big player in the pharmacy business. it means that pillpack has more resources now to fill its vision. over the long-term it raises all sorts of interesting possibilities. pharmacies at whole foods. it is another bugle call that jeff bezos is serious about health care. more but i could say

unfortunately i cannot reveal any details about anything. i'm really sorry. emily: talk to us about the growth of pillpack. obviously you were an early investor, you have been on the board. what is it that made the company so special? when i first met the founders i was aware that this is a big problem. i had a family member who had dementia who had to take prescriptions. i had other family members who had to take multiples prescriptions. the average person over the age of 50 hesitate five prescriptions in the u.s. that involves staying on lines inside of a pharmacy, driving to a pharmacy, taking multiple prescriptions at home, putting them into a pillbox, remembering when to take them, remembering

if there are potential interactions between them and separating them. and that is kind of a hassle for people. was, there on it needs to be a better way. so, i automatically was looking for something, a company in the space that was a full-service company. companyard about the and had the good fortune to meet tj parker, and they were the ideal founder set. tj's family was in the pharmacy business and he automatically understood the mind of people who buy prescriptions and what they do. so that is why i invested specifically because he knew what people wanted. emily: so, we actually interviewed pillpack ceo tj parker a couple years ago. take a listen to what he had to say. tj: the business model is no different than a traditional pharmacy. we dispense medication for

consumers, they pay their co-pays. other than that the service is completely free. we monetize his service assembly any other service does. we just offer other services around that. emily: how do you expect amazon to integrate? removes the long speculation that amazon will get into the dispensing of drugs. i expect amazon to use this to start working on optimization j.p. morgan, berkshire and amazon to start off on the pharmaceutical site. they also need to acquire something around the pbm landscape. we thought they were hard to go and negotiate with. my thinking right now is they uild inng to either in-b stores or acquire a company, so they can have an end to end solution to contact with employers and start deploying

medications to homes. emily: how big of a threat is is to walgreens and cbs? bill: in the short term maybe not a big one because pillpack is a limited service. primarily aimed at people who take more than a few medications a day. they have two innovations. os where they are making sure the combinations are healthy. two, they have this neat rectangular device that helps people manage their daily prescriptions. i have heard estimates of around 40,000 customers. probably not a significant threat to walgreens or cvs. but the power behind it, i think -- emily: how big a potential business could this be for amazon? rico drugs is 1.5% to 2% gdp overall health care spending right now. that is a big business. billion --bout $200

this is kind of a big financial direction they are going and trying to get technology involved in trying to drive medication. pillpack is just not dispensing medication, it is packing it in a right ways that the patient can take it in a proper way so they do not miss to indications in the right order. that is a deviation. incumbents have not done enough. bill: by the way, bringing hardware to bear as an accelerator is a very amazon-like approach. emily: george, i know you cannot talk about the specifics of this deal, but having been on the board of this company, having poured a lot of time into resorting -- researching the space, how d.c. the pharma and online pharma market changing over the next two years? george: when i invested in pillpack, i just thought it was

a huge opportunity to build better from sea experiences. so, i am not really sure how it is going to change. but i think it is going to get a lot better, because people have better access. it will just be a lot easier for everyone. so, that is what i am excited about. it will just be more people-centric. emily: brad, what is next for amazon? brad: they have a mail order license and 50 states but they have a different kind of pharmacy license in many states. if they want to bring pharmacy to some of their retail experiences. so i think this is just the beginning. you mentioned buying a pbm. you know, we are at the beginning. when advantage this acquisition is they are now stockpiling health care innovators. you have tj and elliott from , jpmorgan, warren

buffett. a lot of interesting talent at amazon. emily: all right. thank you so much for stopping by. also george zachary on the phone, thanks for calling in. hugh this hour we're going to be speaking with managing partner and cofounder of founder collective and elite investor in pillpack as well. he will join us, ahead. one of its amazon, competitors is trying to make sure you know longer have to drive to the grocery store. the u.s.'s longest -- self driving cars. kroger is partnering with bay area startup on a vehicle which can steer itself from a grocery store to a customer's home. automatednown for warehouses where robots quickly fill orders. coming up, packing the election.

could the key to safeguarding november's midterms lie with hackers? this is bloomberg. ♪ mark: we had been reporting, multiple people have been shot and killed at a newspaper in annapolis, maryland. the associated press sites a witness uses a single gunman fired into the newsroom. authorities say a person is to me -- custody. people with her hands in the air were seen leaving the complex where the capital gazette newspaper is located. the bureau of alcohol, tobacco and firearms was on the scene. the capital and newspapers including the capital gazette are owned by the baltimore sun bt group. the associated press cites a reporter at the capital gazette who tweeted a single gunman fired into the newsroom and shot multiple times lee's. shot multiple-

people. several are suffering from grave injuries. confirmed theef five fatalities at a news conference a short time ago. a lieutenant then said officers raced to the scene, arriving 60 seconds later, then engaged the shooter. a spokeswoman for a hospital near the newspaper said two patients arrived but she did not know their conditions, again repeating a single shooter killed five people this afternoon and wounded others at a newspaper in annapolis, maryland. as you can see, police are still on the scene from the slap shot. a suspect has been taken into custody. one reporter at the capital gazette tweeted that a gunman fired into the newsroom. the employees stayed underneath her desks until police entered and gave them the all clear. we have had reaction from the white house. president trump, the white house says, issued a statement.

he told reporters, our thoughts and prayers are with all that have been affected. and larry hogan said he was absolutely devastated at this tragedy. we will continue to follow this story and bring you more developments as they i am mark crumpton in new york. let's return to "bloomberg technology" in progress. emily: the u.s. midterm elections are just around the corner. and russia's attack on the 2016 presidential election continues to cost the united states. the risk of electronic voting systems being hacked is paramount concern. so much so that those systems were named part of the nation's critical infrastructure by the obama administration. a new piece of bipartisan legislation was introduced this week in congress to try to prevent election hacks. this is based on the piloted -- here to tell us more is the ceo of hacker one. thank you so much for joining us.

comprised of quarter" ethical hackers. unquote, ethical hackers. 200,000 of them ready to help you reduce your cyber risk. you haven't hired by many companies and organizations to test their systems and find security flaws. in the air force it only took you eight minutes to get in? marten: and we found 200 ways to get into the system. emily: that is very concerning. marten: it is very good that we found them. they are first to know and they fixed them. emily: but certainly china and there areckers trying to get into the systems all day long. marten: exactly. and that is why you need us, the good guys, to get there before them. emily: some find your tactics controversial essay we cannot

necessarily trustees ethical hackers, they can turn these vulnerabilities into blackmail. marten: the bad guys are already out there hacking you every single day. so you cannot get any worse. we test our hackers, we test what they are doing. we know they have good intent and they're committed to reporting to you what they find. that is why we call them white hats. emily: how concerned are you that the u.s. midterm elections will be hacked again? marten: i believe that democracy in the united states is threatened today by a multitude of risks. and what of them is the integrity of the election systems. and not so much that the results would be altered, but that the trust by the people in the system -- emily: president trump has said he does not think the hack impacted the votes. do you think that the votes themselves were impacted new presidential election? marten: in a way it doesn't matter what we think.

we must ensure full integrity of the systems, that is just part of democracy. emily: so how do we do that? marten: we fix the hacking machines. -- voting machines. we make sure we get help from hackers outside. slowly but surely we would fix all those problems. emily: can they actually be fixed? won't a determined hacker find their way into electronic voting machine if they want to? marten: we have such a large army of hackers, so we can outpace them if we want to do so. emily: i mean, how can you be sure? marten: i have faith in the good intent of human beings. we have found and fixed over 72,000 valid security flaws are ready. we know if we just start working on it we will get there. emily: our electronic voting systems the way to go or should we move back to paper ballots? marten: that is a great question. it is a question for the political decision-makers.

we can certainly build technology that will allow the politicians to make whatever determination they make. emily: in addition to the elections, we have been talking about how other parts of the u.s., infrastructure, our electric grid are very vulnerable to attacks, if they are not being attacked at this very moment. should we be waiting for the big one, so to say, the big hack attack that cripples u.s. infrastructure? marten: the likelihood is high but i do think the ship is already turning and we have much better cyber security awareness today. so what do think we are on a path to a better future. but on the past, we may have -- path, we may have some serious breaches. emily: thank you for stopping by. coming up, betting on the crypto market. we will hear from the ceo of blockchain. this is bloomberg. ♪

emily: despite a selloff in 2018, crypto assets are still in high demand, with japan announcing a new cryptocurrency exchange. more companies are trying to tap into institutional demand, including block change -- blockchain. caroline hyde has more from london. what do you got? caroline: a great conversation. -- kchain even equity investment into certain startups. claim --s also

own $300 million ipo. how does blockchain compete? we got this exclusive take. peter: today the institutional market is really mature. there are not a lot of mature platforms out there that people are used to dealing with. so really institutions are looking to get exposure in a safeway. increasingly they are motivated about getting the best execution. today it is fairly nascent. atoline: when you're looking -- they already offer institutional clients. how are you going to be different? otcr: circle trade is an desk. they are offering a training facility. we're focused on offering an end

to end server. research, deep liquidity, the ability to hold customer assets. it is much more comprehensive. caroline: ok. what about when you're looking at the demand? waned with the sudden dive off we have seen with crypto prices? peter: sure. i think there are two separate things. one is institutions trying to set up so they can set up -- trade. i think you have to see the market reverse before you see more of the latter. caroline: where do you think that will pick up most? china, we're talking japan, where do you see demand inbound coming? peter: mostly inbound coming from london and new york. which partly is probably because we are in london and new york.

partly that is where the big financial markets are. most of the inbound right now are you -- from really large family offices or macro hedge funds. that is really limited in new york and london. you are not seeing a lot of institutional demand out of asia. most of asia is very retail-driven. a lot of the market today is very retail-driven. caroline: when you are based in new york and london, how do you see the regulatory environment? your offering and to end, you'll not be offering access to cryptocurrencies but give access to ico's. i think immediately of regulation. are you going to go for those who are already ready to be deemed secure? peter: generally speaking the regulatory environment is easier for institutional clients. consumers are under a different regulatory environment, based around consumer protection. so it is easier on institutions.

at the same time, it is really difficult to figure out where some of this is going. the sec a week ago released some helpful guidance which i think will make it easier for institutions to get exposure. at the end of the day a lot of it comes to reputational management. as a firm, we lean heavily on our board and legal staff to figure out which assess the want to commit to with a long-term. caroline: that was blockchain ceo peter smith. he always has a healthy dose of reality. when it comes to the hype around crypto, the prices surging. it is interesting his take is institutional interest is still nascent. perhaps we will have to see recovery and prices before they really get involved. emily: it has been fascinating to watch this bitcoin roller coaster, rising over 1000% last year, down more than 50% this year. is it the result of just bad news or negative sentiment piling up? caroline: both.

i think the effect that social media has blocked advertising has not helped. i think the fact that we see facebook potentially turning that around. we see the regulatory environment be the key issue. here on my side of the atlantic, the bank of england just sent out letters to ceos of banks, funds, insurance companies. the deputy governor himself sent out a personal letter to the ceos saying beware of crypto. you see it in the u.s. how much they are casting and i over securities, whether they are indeed securities are not. they got a tip of the hat from the sec saying you are not security. i think regulation is a key one. advertising is another issue. and just the height, -- the hy pe, there have been too many. the products are not ready yet. emily: meantime, some of the other coins that people were optimistic about, ripple is way

down. is it too far at this point? can they really turned around? caroline: i think bloomberg intelligence is still saying it is not bottomed yet. maybe it does need to catch up in terms of the actual products that underlie the so-called cryptocurrencies. ether has not done is badly. you can see the chart shows ether is off by about 40%. we're starting to see blockchain being used, the underlying technology. maybe that is showing a little more reality and maybe not just securities. bitcoin in the white line is off by a 50%. check out the bottom. ripple down by about 80%. why? i guess the mighty fall the artist. year sop 35,000% last it comes down the most. it is not asling

decentralized as many would like to see. emily: what is it that is keeping some investors so optimistic, despite so many people saying the party is over? caroline: i hear it time and ceos inrom bank particular saying i am not so sure about cryptocurrencies, but i really like the underlying technology of blockchain. i think that is why the hype totally refuses to drain out entirely. because some of these cryptocurrencies, some of these i ceos have value. you just have to expand. you have to show scale. bitcoin being hampered by the scalability problem. that is being tackled, research is being put into it. a lot of them will have you eventually, but about 80% have been deemed scams so far. emily: bloomberg's caroline hyde life for us in london. coming up, foxconn is breaking ground on a $10 million plant in the u.s. heartland, all in the

backdrop of rising tensions within washington and beijing. this is bloomberg. ♪

emily: this is bloomberg technology. president trump traveled to wisconsin to attend a groundbreaking of foxconn's $10 billion plant on thursday. the administration sees us as a big win that will bring jobs to the region, but there has been criticism of the tax break incentives that foxconn received. and trade tensions within the u.s. and china has not ceased. company's it was the biggest challenge. alibaba is scaling back its investments in the u.s. ande joined by selina wang garrett. talk to us about the economic and political irony, given that

foxconn is also china's largest employer. garrett: i think trump wants to make foxconn one of america's biggest employers. he was very happy. the kind of trump the media show he loves to point to. he kept talking about how many jobs this is going to bring. if this goes perfectly over the next 15 years they should be about 13,000 pretty high-paying jobs created. he tweeted this morning it will bring 15,000. no matter how well it goes it is not exactly the hyperbole he's bringing into it. it is very controversial. not everyone in wisconsin supports it. to $4was about three billion of incentives that were promised and of course that is not all up front. that comes in the form of tax breaks and subsidies as the plant gets built over the next decade. emily: a tweet from the governor

wisconsin, we are beginning to see the statewide economic impact of foxconn as businesses and workers all over the state are benefiting. foxconny operational, is expected to bring in one point $4 billion in supplier purchases annually within the state. of course the deal that was ultimately struck was very controversial. how many jobs are actually being created? gerrit: best case scenario, 13,000. those are not going to happen tomorrow. this was a groundbreaking ceremony. they don't even have the building set up yet. the average salary of those jobs, the commitment that foxconn made to his cousin is they would be paid $56,000. these are well-paying jobs, not silicon valley well-paying jobs, but for the area they would be manufacturing jobs. they are the kind of thing we can see people working together, working in tandem with robots. exactly the kind of jobs president trump thinks of when he thinks about bringing jobs. to america.

it is very core to his message so that he can get deals like this done. theourse we have another at weather in reality those jobs will actually come to the extent that they want them to. emily: watching president trump shake cans with the chair of foxconn, who has been out there saying a tech war is the biggest challenge to the company, is kind of crazy. selina: it is really ironic to say the least. this deal might not be great for wisconsin. there are a lot of tax breaks and incentives they are doing to bring foxconn there, not to say the least of this trade will or -- trade war could hurt the farmers there. so the backdrop of this handshaking event, there are a lot of ominous things that are at work. just yesterday trump said he wants to block chinese investments in the united states. they want to expand the powers. on the one hand this is great for bringing jobs to america. bethe other hand is good

extremely harmful to foxconn and a supply chain. emily: meantime, alibaba has only made one investment in the united states so far this year. what should read be reading into that? selina: the data is pretty shocking. there has been a clear pullback in silicon valley. the in the years following ipo the sentiment was so different about alibaba. they were supposed to be making these huge sizable stakes, everyone was looking at their investments in companies like snapchat, lyft, tango. they were making tons of deals. there was some concern in the valid that the chinese investor was taking board seats and maybe wielding too much influence. now we have seen them dramatically pull back and they have only made one tiny investment this year. my sources have told me they did lose their top dealmaker and they are not replacing him, and i think that is pretty indicative of the prioritization they are putting on investments in the u.s. but there is a lot of stuff at work behind the scenes here. emily: what is alibaba saying?

selina: alibaba has declined to comment. and this is a company that has repeatedly said they are not out there to compete with amazon, they are not out there to steal u.s. consumers. but could they become more competitive? selina: in the near term it is differently not their priority. to have a lot more space and domestic china and southeast asia where they just pour $4 billion into the e-commerce market. before their focus was to find partnerships and things that could be tangential to their core e-commerce in china. even know they will probably not be able to make any flashy deals in the future, they are still investing heavily around the world. they will invest $15 billion in r&d around the world. they want to build labs around the world for scientists in the u.s., israel, russia, and china to be leaders in robotics, all areas that the trump administration is very concerned about. emily: paint a bigger picture

for us here. obviously we have this groundbreaking in wisconsin, we wee potential legislation, have a continued back-and-forth between the white house and beijing. i mean, how does all this impact the global supply chain? gerrit: it is difficult to tell. from foxconn's perspective, they got a very good deal from wisconsin, regardless of the whole trump and trade war factor. but you could tell in kuwait that foxman chairman was talking -- tell in the way that the foxconn chairman was talking, jobs, jobs, jobs, speaking just before the president took the stage. he is obviously appealing to trump on a personal, political level to say look, i am not one of those bad for the companies that is trying to compete with you and take away jobs from americans. i am here on your side. and i think that they understand

that if you can give trump the headlines that he wants, he may go easier on you, or you may not become at the center of his crosshairs. but at the end of the day, this trade war is continuing, the rhetoric is escalating, and the trade barriers that do go out to affect foxconn's work in china, which may be another good reason for them to do -- to begin manufacturing things here in the united states. emily: gerrit de vynck and selina wang, thank you for a much. beijing's multibillion-dollar initiative has been lost the storm. when equity player says he is not missing out on opportunities. with bloomberg in beijing and talked about how he plans to capitalize on china's changing -- isour investment strategy focused on --

we focus on industries such as automotive, advanced manufacturing, health care in the consumer space. >> what within the auto sector is particularly attractive? which areas are you focused on? bao: very much the electric vehicle sector. that is the future. just like mobile phones, like internet, e-commerce. the arrival of it is revolutionary. two, it will come much faster than people are expecting. investing on you is in companies, using high-tech and bringing that accurate do you have some it -- examples of businesses you are looking at in europe obama's lies. yi: -- -- along those lines.

it toat we do is we bring industry this great product. >> you have a euro fund as well. are you going to expand your funds? yi: our next step is to create a bigger fund in euro and u.s. dollars. then we will expand the market out of germany into europe or even the u.s.. >> where are you seeing the greatest opportunity now? yi: i think the greatest opportunities from china's perspective is arch. for advancement, which is china's need for industry upgrade. there is a huge market demand for these industrial upgrades. there is also renaissance, which is china's one road.

gh, whichalso cut throu is some of china's already leading sectors. for example, artificial intelligence, certain health care technology, electric vehicles. domestic consumption upgrade, which is written in china's constitution now, people's pursuit of a better life. speakingat was bao yi to bloomberg's tom mackenzie. microsoft is closing the gap with amazon in obtaining federal security approval. it provides an edge in the pentagon's winner take all contract. amazon is the only tech firm currently certified to store the government's most classified and sensitive data, which other companies complain favorite -- favor it. coming up, ai and space.

the iss is getting a new member. what makes it different? this is bloomberg. ♪ mark: i am mark crumpton in new york. at least five people are dead, several others are reportedly gravely injured after a mass shooting at the capital gazette newspaper in annapolis, maryland. authorities say a gunman who opened fire inside the newsroom at the building housing the paper has been arrested. you are looking at a live picture from the office complex located in maryland. arrivedrnor larry hogan at the scene earlier and said he was absolutely devastated by the

tragedy. >> it is a tragic situation. we don't have all the information yet and we can't give all the information yet. this is an active crime scene an investigation. but we have had several fatalities and several people that are in the hospital. tweetedesident trump that his thoughts and prayers are with the victims and families. the president also thanked the first responders for their efforts. meantime, the associated press reports that a federal official briefed on the shooting identified the suspect as a white male reportedly is not cooperating with investigators. in response to the shooting, around the nation there has been police activity. here in new york the police department department has sent patrols out to major new media networks. the newspaper as part the newspaper as part of capital gazette communications. it is part of the baltimore sun

media group. recapping our studio -- story, at least five dead, several wounded, some said to be in grave condition after a mass shooting this afternoon at the capital gazette newspaper in annapolis, maryland. reporter telling the associated press that a gunman walked in and opened fire. that he and his colleagues scrambled underneath their desks and tried to wait out the shooting. police came in and apprehended the suspect. i am mark crumpton in new york. now let's return to bloomberg technology already in progress. open the pod bay doors, hal. >> i'm sorry, dave. i'm afraid i can't do that. the most is perhaps low-cut -- iconic line uttered by an ai robot in space. hal refusing a national's direct order. astronaut's direct

order. >> how are you today? >> i'm a bit tired at the moment. how about you? i can do a lot. do you want to know more? >> yes, sure. >> we can do skilled training with a rubik's cube or play games. i can assist you with instructions. my robot feelings are fine. emily: it is called simon and it is basically a flying and talking basketball with a screen. it will be answering asked the not -- here to tell us more about the iss's newest member is the project lead for simon. matteas, is simon going to be

more well-behaved than hal? have you trained the ai to do that? >> definitely. simon is actually trained by humans and can only do the things that we trained him. so don't worry that he is going to be a hal imitation. emily: how is this any different between the tech behind alexa in space? is it a novelty or is it a breakthrough? mattias: definitely a breakthrough. very deeping conversations with simon. imagine you are national and productive -- conducting an experiment and now at 43 of more than 100 steps. what you can ask simon is what kind of tool do i need to use right now. and those kinds of questions assignment is able to answer.

he kind of incorporates context into his conversation. give us a more examples. what do you imagine astronauts will actually be asking for help with? matthias: right now the main focus is on these experiments. for example we have a so-called crystallization experiment that simon needs to do. s will then call simon. he is autonomously free flying. they can say, simon come here, then he can fly there. you can got himself through the experiment. that is how we interact with simon. emily: we have covered a lot of ibms flashier releases, watson, of course, the debater a couple weeks ago. there is this big question of how the/we help improve ibm's business -- how this will actually improve ibm's business.

how will this impact the bottom line? matthias: the cool thing about simon is that the actual technology is already existing. is the ibm technology based on our ibm cloud. we are using existing out of the box ai services that can be combined to build such a great solution. ibm's ai, why haven't projects in general lived up to the hype, in a way? matthias: i think we are quite living up to the hype, in my opinion. it really depends always on how much you train the system and how good you train the system. and we started with the project simon in 2016, working together with airbus and also the german space agency to make simon happen, actually. we trained them quite a lot and that is why it is very good system right now. emily: matthias biniok of ibm,

thank you so much for joining us. ♪ g us. ♪

emily: let's return will more time to our top story. amazon buying pillpack for $1 billion. the acquisition will give the e-commerce giant in nationwide drug would network -- drug network and bring into direct competition with traditional from his he chains. we are by david frankel and cofounder of thunder collector. thank you so much for joining us. what is your reaction to this? obviously good news for you as an early investor. but what do you make of amazon's ambitions? david: we are tremendously excited for this. i'm absolutely thrilled for the team, the founders. it is a huge leg up for pillpack . probably the most mission-driven founders i have ever come across. they had fantastic options both in terms of financing and

acquisition. ultimately they used us as the launchpad to continue the mission. emily: you know, where do you think this is going? you have certainly spent a lot of time researching the pharma business. he saw the big incumbents like walgreens and cvs, you have amazon buying an upstart. how do you expect this industry to transform or the next few years? david: i think it is like all tech advances. it feels like it is going very slowly until it feels a can is going very, very quickly. i think that amazon has been putting people in a position to look at the space for the last few years. pillpack has been working furiously at literally bowling over challenge after challenge to get to where they are. and i think ultimately what you're looking at is exactly the way amazon provides delivery of anything else you need.

they will ultimately deliver your drugs, too. interact withu them in terms of home delivery, you should expect to do that in terms of pharmacy now, too. i think that is the ultimate vision. emily: now, in many ways pillpack, and we heard a bit earlier from the ceo in an earlier interview, they said they are not much different from a traditional pharmacy. what is it that you think is it that makes pillpack so special and such an attractive target for amazon? david: you know, i think it is always what you don't see. people interact with pillpack in terms of the box and the pack of meds, and it is delightful. it means you don't have to sort out meds in traditional boxes. pillpack is very much behind the scenes. a company really harmonizes a bunch of difficult, spaghetti

archaic,our industry, old systems were you need to adjudicate drug by drug in a package, sub-second basis. the tech that is being built on the scenes to do that quickly, then literally everything behind the scenes that gets the right drugs to you at the right time that you can take in the right time, it sounds incredibly simple, just like self driving simple, but started the complexity to actually produce that was tremendous. and i think that when amazon really went under the skin of that, a tremendous simpatico arose from that. there is a platform in pillpack that is very, very tough to be. aspirationally, many will want to do this, many will have to do this. to actually get there in a seamless way, given the

complexity of the u.s. health system, is really complicated. and i think amazon recognize that. emily: how big a threat these think this is to the incumbents like walgreens and cvs? know, i think i can speculate as well as anyone else. i think that they will have to respond, and they will have to respond more energetically. say that theo traditional retailers have not started to think a lot about this. willertainly this action throw down the gauntlet and accelerate in a way that i think will ultimately be exceptionally good for all consumers. and ultimately was the mission that founders of pillpack set out to accomplish. early david frankel, investor in pillpack, thank you so much. bloomberg's emma chandra explained pillpack's disruptive model and took a look inside the company's operations. check it out.

emma: amazon is taking on the neighborhood pharmacy with its $1 billion acquisition of pillpack. >> at a traditional retail pharmacy it is all-around individual prescriptions. emma: an online pharmacy with a different approach. >> separate the different bottles into boxes. emma: that box is then delivered to a customer every few weeks. >> literally have a pack for each time of day. emma: pills are sorted by the time and date the should be taken. >> 8:00, 12:00. tj parker is focused on the 30 million americans that take five or more prescriptions a day. >> they are the highest value customer in the market. emma: he launched pillpack in 2014 and has a license in all 50 staates. headquartered in massachusetts, pillpack has existed that -- 50,000 square foot warehouse.

here, robots help sort hills. -- pills. verifying refills and confirming insurance. >> this model is no different than a traditional pharmacy. we dispense medications for consumers, their insurance company isures, and they pay the co-pay. otherwise it is free. emma: they also have relationships with most drug -- --y say it works with most d they don't think about the overall value of the consumer. their system is designed to be about individual transaction. if they decided they have to build a pillpack, they could do it, it would just take a long time. emma: emma chandra for bloomberg news. emily: that does it for this

edition of "bloomberg technology." from san francisco i am emily chang. this is bloomberg. ♪

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