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DEERFIELD, Ill. — The partnership of Walgreens Boots Alliance Inc. (WBA) and pharmacy benefit manager Prime Therapeutics positions the companies to capture a larger share of the prescription drug market and better compete with such players as CVS Health.
St. Paul, Minn.-based Prime, the nation’s fourth-largest PBM with 22 million members, is owned by 14 Blue Cross and Blue Shield health plans. Under the partnership, WBA and Prime plan to combine their central specialty pharmacy and mail service businesses into a jointly owned company with its own board and executive team. The arrangement would give WBA more negotiating power in drug purchasing and enable it to cut costs.
Also through the alliance, Walgreens will become the core participant in Prime’s national preferred pharmacy network starting next year. That would enable Walgreens’ more than 8,000 stores to offer lower prescription prices to Prime members in preferred networks.
The partnership, too, includes data sharing between WBA and Prime, allowing both companies to better control costs and manage the health of patients.
Walgreens and Prime expect the transaction merging their specialty and mail businesses to close in the first half of 2017, pending regulatory approval and other closing conditions.
The deal with Prime marks the second PBM partnership for Walgreens in recent months that could help it process more prescriptions and give it more muscle to compete against CVS, whose model unites a retail drug chain with a large PBM.
In March, Walgreens formed a partnership with UnitedHealth Group Inc.’s OptumRx, which manages prescription drug benefits for more than 66 million Americans. The alliance saves OptumRx members money when they fill certain 90-day prescriptions at Walgreens or via its mail order service. The deal also includes data sharing.
Stefano Pessina, executive vice chairman and chief executive officer of WBA, has been open to partnering with a variety of companies in the health care arena to grow scale and lower costs.
“The prescription drug needs of consumers are often changing, and this unique collaboration will help us deliver value, care and service to our patients and the communities we serve,” stated Alex Gourlay, co-chief operating officer of WBA. “Walgreens has a long history of working with our business partners to create new solutions to help improve access and patient care. We look forward to providing a differentiated and patient-led pharmacy experience to more Prime members.”
Also slated to come under WBA’s umbrella is EnvisionRx, a small PBM now owned by Rite Aid Corp. WBA plans to acquire Rite Aid in a $17.2 billion deal expected to close this year, pending federal antitrust review.
