Walgreens takeover of Rite Aid could mean better deals from drugmakers

Walgreens’ acquisition of Rite Aid comes as Rite Aid reverses its fortunes from its disastrous $3.4 billion acquisition of Eckerd Pharmacy and Brooks Pharmacy in 2006.

An analyst with investment banking firm Jefferies seemed to agree Wednesday, noting that while the acquisition will boost Walgreen Co.’s USA pharmacy market share from 19 percent to 26 percent, “We believe this industry consolidation could bring store closures and/or divested store opportunity for CVS Health”.

“Joining together with Walgreens Boots Alliance will enhance our ability to meet the health and wellness needs of Rite Aid’s customers while also delivering significant value to our shareholders”, said Rite Aid Chairman and CEO John Standley.

Walgreens and Rite Aid expect their deal to close in the second half of next year. Big-box chains like Wal-Mart and supermarkets have become big players in selling prescription drugs. Drugstore chains face increased competition from mail-order pharmacy services and pharmacies inside grocery store chains.

“It’s one of the biggest things we are fighting as independents”, Mulpuri said. “It will result in less options for the consumer”. Can those two stores be expected to remain open in the long run?

“At a minimum, regulators should closely scrutinize this merger, particularly in regions of high concentration of their pharmacies”, Douglas Hoey, the head of the National Community Pharmacists Association, said in a statement Wednesday. “However, despite these and many other proof points, Medicare does not now recognize pharmacists as full-fledged providers, and does not compensate them for numerous important services they provide”. “They know me, they know their customers and they know how to take care of them”, Schmidt said. “We also do deliveries at no charge… seniors who can’t get their medications… or if you have a sick child at home, I will deliver it. You don’t get that at a big corporation”.

Phil Caruso, media relations specialist at Walgreens Boots Alliance Inc., said Rite Aid stores will initially continue to operate under the Rite Aid name after the buyout is complete, but it is too early to address the future of specific Rite Aid locations. That amounts to about 64 percent more than the next largest competitor, CVS, not counting that company’s still-evolving partnership with Target.