Walgreens Doesn’t Get Bigger
In an exception to what seems to be the growing trend, Walgreens (currently the second-largest pharmacy chain) says it isn’t going to buy a health insurance company.
As Forbes reports, Walgreens Boots Alliance CEO Stefano Pessina says that while Walgreens will need to be flexible and adapt to customers’ future needs, but that doesn’t mean that it must also buy a health insurance company.
There is much to do with or without a merger with a health plan,” Pessina told analysts during a call to discuss the company’s fiscal second quarter earnings report. “I don’t believe that change is only possible if you merge with a health plan. There are many other models.”
What exactly Pessina means by “other models” is unclear. He did add that Walgreens needs to invest in its businesses and “change a lot,” but for now, it seems that a huge Walgreens takeover is off the books This comes a month after reports of Walgreens potentially buying major pharmaceutical distributor AmerisourceBergen ended (though parts of the deal could still go through), and just nine months after Walgreens massive takeover deal with Rite Aid was scrapped.
There are a lot of unknowns for Walgreens, but one thing seems to be clear: It will need to change in the near future. While it’s latest earnings report is strong—its earnings went up 16.6%—but that could very easily change. As Perry Cohen, CEO of The Pharmacy Group, told Drug Topics last year, pharmacy is changing quickly and “retail pharmacy needs to find new revenue streams to maintain profitability.”
The big question is this: Will Walgreens stay ahead of the race, or will it be left behind its competitors who are quickly consolidating into larger and larger players?