Walgreen Co. and Alliance Boots GmbH have entered into what they say is an “innovative long-term partnership” with AmerisourceBergen Corp.

Walgreens, Alliance Boots, AmerisourceBergen, long-term partnership, prescription drugs, pharmacy, Greg Wasson, Steve Collis, Stefano Pessina, health care, community pharmacies, pharmaceutical wholesaler, generic drugs, primary distribution agreement, Cardinal Health, generic pharmaceutical, drug chain, Walgreens Boots Alliance Development GmbH, AmerisourceBergen Canada Corp., Kohl & Frisch

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Walgreens, Alliance Boots, AmerisourceBergen join forces

April 8th, 2013

DEERFIELD, Ill. – Walgreen Co. and Alliance Boots GmbH have entered into what they say is an “innovative long-term partnership” with AmerisourceBergen Corp.

Executives at the three companies say the agreement reached late last month will enable them to benefit from greater scale and global opportunities. Under the terms of the deal, Walgreens and Alliance Boots will have the opportunity to eventually purchase up to a 23% stake in AmerisourceBergen.

Executives say the partnership between the three companies will see them work together on programs to improve service levels and efficiencies, while reducing costs and increasing patient access to prescription drugs.

“[This] announcement marks another step forward in establishing an unprecedented and efficient global pharmacy-led health and well-being network, and achieving our vision of becoming the first choice in health and daily living for everyone in America and beyond,” Walgreens president and chief executive officer Greg Wasson said when the agreement was announced on March 19. “We believe this relationship will create a wide range of opportunities and innovations in the rapidly changing U.S. and global health care environment.”

The trio of companies say their new arrangement will make it easier for manufacturers to bring products to market, increase accessibility to the benefits of global sourcing and best practices for community pharmacies, and provide patients around the world with better access to health care.

“This agreement with AmerisourceBergen, which we consider to be the best-positioned pharmaceutical wholesaler in North America, is a promising development for Walgreens and Alliance Boots following the formation of our strategic partnership last year,” Alliance Boots executive chairman Stefano Pessina says.

He adds that joining forces with AmerisourceBergen creates a network that is well positioned to anticipate increasing market needs and expectations across the globe.

For their part, executives at AmerisourceBergen say the partnership agreement addresses the changing realities of health care around the world. “We all recognize the imperatives of health reform not only here in the U.S. but also globally,” AmerisourceBergen president and chief executive officer Steve Collis says.

The deal with Walgreens and Alliance Boots creates what Collis calls “a unique opportunity to unlock value in the pharmaceutical supply chain by collaborating to leverage all of our proven strengths.”

Under the terms of the partnership agreement, Walgreens and AmerisourceBergen will expand their established relationship beyond the specialty items currently distributed by AmerisourceBergen to a 10-year comprehensive primary distribution agreement for branded and generic drugs.

As a result, Walgreens’ distribution deals with other wholesalers — most notably Cardinal Health Inc. — will not be renewed.

Beginning in 2014, more of the generic pharmaceutical products that Walgreens has historically self-distributed will come from AmerisourceBergen.

Walgreens executives note that the agreement is expected to provide substantial operational benefits for the drug chain, including an enhanced supply chain with daily deliveries. In addition, AmerisourceBergen will access generics and related pharmaceutical products through Walgreens Boots Alliance Development GmbH, the joint venture established by the two companies last fall.

AmerisourceBergen’s deal with Walgreens and Alliance Boots was one of two major moves the company made last month.

A week after the partnership was created AmerisourceBergen agreed to sell its Canada operation — AmerisourceBergen Canada Corp. — to the Concord, Ontario-based wholesaler Kohl & Frisch Ltd. for between $80 million and $100 million.