Over two days earlier this month, WBA unveiled an integrated pharmacy offering with PBM OptumRx and then announced that it’s boosting its equity stake in drug distributor AmerisourceBergen.
The highlight of the offering with OptumRx is that members enrolled in the program can choose to fill 90-day prescriptions at home delivery co-pay levels at any Walgreens pharmacy. Meanwhile, through the exercise of warrants from its long-term partnership with AmerisourceBergen, WBA will hold almost 15% of the distributor’s outstanding shares. Plus, WBA will be able to buy more shares via warrants exercisable next year.
And, not to forget, the acquisition of Rite Aid and its nearly 4,600 drug stores, almost 80 RediClinics, and PBM and specialty pharmacy capabilities is pending.
What does all this mean? Check out yesterday’s blog post by Adam Fein of Pembroke Consulting and the Drug Channels Institute, who likened WBA’s extending reach in the drug channel to an enlarging web.
“As these deals illustrate, WBA is no itsy-bitsy channel participant. It’s spinning a complicated network of silky connections throughout the health care system,” Fein said in the post on his “Drug Channels” blog.
Of the WBA-OptumRx relationship, he wrote: “By linking up with Walgreens’ broad retail network, OptumRx gains a viable multichannel option to compete with CVS Health. By becoming the preferred retail pharmacy for OptumRx’s PBM business, Walgreens gains incremental store traffic, albeit at a presumably reduced margin.”
And Fein noted that WBA is poised to grow its stake in AmerisourceBergen even further. “WBA also has the right to acquire 19,859,795 ABC shares on the open market. Once it does so, WBA can designate a second board member,” he wrote.
Such deals, along with CVS Health’s unique retail pharmacy-PBM model, may sound an ominous note for stand-alone PBMs, according to Fein. “Pharmacy has become the land of the giants, with larger companies consuming all or part of the smaller players,” he said. “In a more integrated health care system, will the pure-play PBM model lose relevance?”