Retail News Breaks Archives
Sale of Walgreens' PBM business closes
June 13th, 2011
ROCKVILLE, Md. – Catalyst Health Solutions Inc. has wrapped up its acquisition of Walgreens Health Initiatives (WHI) Inc., the pharmacy benefit management subsidiary of Walgreen Co.
Catalyst said Monday that over the past several months, teams of Catalyst and WHI associates have been collaborating to identify best practices from both organizations to ensure an efficient integration.
"We have been pleased with the integration planning and are highly confident that the company will rapidly realize the many strategic and financial benefits of this transaction,” David Blair, chief executive officer of Catalyst, said in a statement.
Under the $525 million deal, announced in early March, Catalyst acquired all the capital stock of WHI.
The sale marked Walgreens' exit from the PBM market. For Catalyst, the acquisition of WHI swells its PBM membership from about 7 million people to more than 18 million, with annual prescription volume slated to grow from 80 million to over 165 million.
Walgreens has agreed to provide certain services to Catalyst following the completion of the deal to ensure a smooth transition for WHI customers and patients. The Deerfield, Ill-based drug chain previously reported that it expects the services to cost about $40 million.
Meanwhile, Catalyst has agreed to provide prescription drug benefit services for Walgreens' 244,000 active employees in addition to retirees and dependents, as well as to administer the Walgreens Prescription Savings Club.
The companies also have said that Catalyst will maintain a significant presence in the Chicago area for Walgreens employees slated to join Catalyst as part of the transaction.
At the time the deal was announced, industry analysts called the sale of WHI a positive move for Walgreens. They said WHI lacked the scale to enable Walgreens to compete with the top players in the PBM arena and that the business diverged from the drug chain's core strategy of positioning its vast store network as the "center of gravity" to become the nation's "first choice for health and daily living needs."