Walgreens and RiteAid: The big get bigger

From a recent RetailWire discussion, here’s my comment on the proposed acquisition of RiteAid by Walgreens. The drive to consolidate has never been stronger, and it makes particular sense in an industry wrestling with cost control issues:

Consolidation in the pharmacy industry parallels the same trend among health insurers — not to mention just about every other industry you can think of, from brewers to airlines. Whether the combined Walgreens/RiteAid company can develop more pricing leverage from pharmaceutical suppliers is a different question, even though their store count now far exceeds CVS. Unless I’m mistaken, CVS (through its Caremark subsidiary) is a bigger player in the “pharmacy benefits” side of the industry, so Walgreens still has an opportunity to become a more vertical company in the future.


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