Walgreens to Purchase Rite Aid Stores

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Walgreens has finally received approval to acquire 1,932 Rite Aid stores, three distribution centers and inventory for $4.375 Billion in cash.  This acquisition will leave Rite Aid with 2,600 stores and thus, be one of the three remaining nationwide chain pharmacies together with CVS and Walgreens.  Walgreens will now be able to negotiate with drug manufacturers for lower drug costs, providing competition for CVS

The Rite Aid store purchases will begin in October and should be completed in the Spring of 2018 followed by rebranding those stores to Walgreens.  Most of the stores to be purchased are located in the Northeast and Southern United States.  As a result, Walgreens will have close to 10,000 locations (CVS has more than 9,600 stores) and expects to save about $300 Million annually through cost cuts over the next four years.   Walgreens also owns Duane Reade pharmacies .

It will be interesting to watch what happens to Rite Aid in the future as their stock plummets.    The deal does include the option for Rite Aid to join the Walgreens group purchasing  agreement for discounts on generics, which should help them to compete with the other chain pharmacies.

For additional reading, please access the following links:

https://www.reuters.com/article/us-rite-aid-m-a-walgreens-boots/walgreens-gets-regulators-nod-to-buy-rite-aid-stores-idUSKCN1BU1KP

http://money.cnn.com/2017/09/19/news/walgreens-rite-aid-deal/index.html

PBIRx has been exclusively providing intelligent solutions to clients in the management of pharmacy benefit costs since 1993. With a staff that includes IT personnel, actuaries, financial analysts, clinical pharmacists, attorneys, HIPAA Compliance Officers and many more experts, PBIRx’s mission is to create optimal health care outcomes while minimizing overall health care costs. For more information, please visit www.pbirx.com or call (888) 797-2479.

Rite Aid Acquires EnvisionRx

PBIRx®

Intelligent Solutions in Pharmacy Benefits

612 Wheelers Farms Road, Milford, CT 06461

(888) 797-2479

Rite Aid Pharmacy chain announced today its $2B acquisition of EnvisionRx, a Pharmacy Benefit Manger. EnvisionRx offered a robust Medicare Part D program, which Rite Aid will benefit from. This acquisition will be interesting to watch since Rite Aid is often excluded in various PBMs smaller pharmacy networks. Also of interest is that Walgreens Pharmacy chain sold their PBM last year with a much bigger focus solely on Specialty Pharmacy and the CVS Pharmacy chain seems to be profiting from the acquisition of CVS Caremark a few years ago.

According to the Wall Street Journal, CVS Health Corp.'s pharmacy services business revenue increased to $23.9 billion (that's a 22% jump) for the three months through December 31. As stated in the article, this was driven by "continued growth in specialty-pharmacy sales after they acquired Coram Specialty Infusion Services." Due to its growth in its Medicaid programs, it has been noted that the pharmacy network claims also grew at 8.2%.

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