Inside This Issue - News
Walgreens said to be eyeing sale of PBM
November 8th, 2010
DEERFIELD, Ill. – Published reports late last month said Walgreen Co. is looking to sell its pharmacy benefit management (PBM) business and has hired an adviser to run an auction.
Citing people with knowledge of the matter, several news agencies said the drug chain has hired Bank of America Corp. to handle the sale of Walgreens Health Initiatives (WHI).
According to sources cited by Bloomberg News, the PBM could sell for between $500 million and $1 billion, depending on what assets are included in the deal.
The reports said that Walgreens received first-round bids for the business during the third week in October, with Medco Health Solutions Inc., Express Scripts Inc. and CVS Caremark Corp. — the nation’s three largest PBMs — among the companies expressing interest.
Walgreens executives have said for some time that they were not sure if a PBM fit the company’s plans going forward. They have stressed that the company’s strategy is to provide patients with health care services rather than process claims.
Along those lines, Walgreens has been focusing much of its energy over the past few years on expanding its retail and work-site medical clinics as well as the specialty pharmacy, home health care, infusion and respiratory therapy businesses.
“Their business model never relied on a PBM,” Andrew Wolf, an analyst with BB&T Capital Markets in Richmond, Va., told Bloomberg. “They have always approached the market differently. They have looked to increase their breadth of services so they are in direct conversation with payers.”
WHI is the ninth-largest PBM, with about 2.5% of the market and around 100 million prescriptions processed every year.