Likely feeling pressure from recent moves by both CVS and Amazon, Walgreens demonstrates their prowess as an innovative industry heavyweight – expanding horizontally and vertically.
Drivers for AmerisourceBergen Acquisition
Profitability: A key driver for the deal between AmerisourceBergen and Walgreens Boots Alliance (WBA) is likely purchasing synergies. A proven strategy after mergers is to compare pricing with the goal of reducing acquisition costs.
Amazon threat: Naturally, every action made by a retail store after 2010 has to be scrutinized under the scope of Amazon. WBA will gain an impressive logistical force in ABC.
Playing Catch-Up with CVS
CVS has made some impressive moves in the past few years, almost stretching the entire vertical of the pharmaceutical supply chain while maintaining the largest retail pharmacy footprint.
Of course, after a long investment and courtship with AmerisourceBergen, WBA finally pulled the trigger on a full acquisition in February 2018.
However, that isn’t to say WBA has not had its share of deals. After swallowing up companies to become the second-largest pharmacy by retail footprint, WBA has also focused on the vertical (up and down the pharmaceutical supply chain) while continuing to focus on dominating the horizontal (providing healthcare).
AllianceRX: WBA cemented the alliance with Prime Therapeutics in 2017 to combine their specialty and mail service pharmacies.
UnitedHealthcare & OptumRX: To be fair, WBA has taken steps to cozy up with OptumRX and UnitedHealthcare since early 2016 where they first started to integrate their retail presence with OptumRX’s mail order pharmacy unit and Part D plans. Admittedly, Cardinal signed a deal only 6 months later and Cardinal still supplies OptumRX’s specialty and mail-order business.
Getting Ahead: Providing Healthcare Past Pharmacy
Alex Gourlay, co-COO of WBA, announced at the JP Morgan Healthcare Conference that their newest format may include lab services, optical services, and patient care partnerships. As a testament to his claim, WBA announced a partnership with UnitedHealthcare to develop their pilot program for MedExpress urgent care centers in February 2018.
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