Walgreens announces deal to buy Rite Aid for $9 a share

http://www.cnbc.com/2015/10/27/walgreens-announces-deal-to-buy-rite-aid-for-9-a-share.html

by skhatri11 • 11 years ago

63 72 11 years ago

davidf185• 11 years ago

I don't understand why this purchase was not turned down for on grounds of anti-trust. There will be less competition for lowering drug costs. How is this a good thing for American health care?

There are four large pharmacy chains in NYC and now Walgreens owns three of the four. Not long ago Walgreens purchased Duane Reade. Now the competition is limited to Walgreens and CVS.

cjensen• 11 years ago

This is just an announcement that the two companies plan to merge. Following this announcement, the government will analyze the deal and decide whether or not to oppose it.

itslennysfault2• 11 years ago

That's still "competition". Coke or Pepsi, Comcast or Time Warner, Everything is condensing down to two options.

btw... I'm not arguing with you. It sucks.

skhatri113• 11 years ago

Hearing rumbles that this deal isn't going to go through. But I will say from experience that when companies announce such deals they have already done their homework and generally feel pretty good about anti-trust issues. We'll be interesting to watch. Either way - Wall Street is selling Walgreen's on the news.

ceejayoz• 11 years ago

I will say from experience that when companies announce such deals they have already done their homework...

Well, not always. https://en.wikipedia.org/wiki/Attempted_purchase_of_Time_War...

mindcrime3• 11 years ago

I don't see the anti-trust thing. In addition to the "drug store" chains, there are pharmacies embedded in (many|most|all?) Wal*Mart stores, Target stores, Publix stores, Kroger stores, Harris Teeter stores, etc. I would guess there are other grocery chains that have pharmacies as well. Plus there are still independent pharmacies. I don't know what the situation is like in NYC specifically, but just to share an anecdote from where I live - there are two "indy" pharmacies within walking distance of my office on Main Street in Durham, NC.

calinet63• 11 years ago

The grocery stores are agglomerating as well.

Not to mention the airlines, and I just paid a month's rent to visit my parents for Thanksgiving, which I was forced to do because, you know, grandparents have an expiration date, and Thanksgiving is practically a holy day in our family.

I'm tired of it. Monopolies are real, and they tend to be bad for the people they purport to serve. But this is a power feedback loop that has tipped over the edge and probably gotten past control. Where are our checks and balances?

joe5150• 11 years ago

Some data on the largest retail pharmacies [pdf]: http://www.drugstorenews.com/sites/drugstorenews.com/files/P...

It has figures for total stores and stores with pharmacies, and it looks like it is either most or all.

davidf185• 11 years ago

Target pharmacies were bought by CVS. No Walmart in NYC, nor the other chains that you mention. NYC is dominated by Walgreens, Rite Aid, Duane Reade, CVS.

brianbreslin• 11 years ago

CVS owns the target pharmacies just FYI.

chejazi• 11 years ago

I agree that less competition is bad, but isn't the primary reason for expensive drugs is because of the Pharmaceutical companies who discover them, not the pharmacies that distribute them? Regardless, this change certainly won't help.

JoshTriplett2• 11 years ago

I don't understand why this purchase was not turned down for on grounds of anti-trust. There will be less competition for lowering drug costs. How is this a good thing for American health care?

Numerous other pharmacy chains exist. Many major stores have pharmacy departments. This merger would hardly creates a monopoly or anywhere near one, nor will it reduce competition to a degree that one company will be in an abusive position.

davidf185• 11 years ago

Well, in certain regions of the country such as NYC it effectively does create a monopoly and it may be true of other regions as well.

muzakthings• 11 years ago

Pharmacies have zero to do with drug costs.

Try pharmaceuticals, insurance companies, the FDA, and trade policies if you want to find the culprits or actual structure behind the prices of drugs.

mason55• 11 years ago

If you want to get pissed about a lack of competition in the pharmacy market then look at the two large PBMs. They set the prices of drugs that every drug store pays. If they choose to raise prices and the insurers don't move in lockstep then you're stuck filling prescriptions at a loss.

Oh, and one of them is owned by CVS.

http://www.npr.org/sections/health-shots/2015/10/22/45060056...

refurb• 11 years ago

PBMs don't set the price that drug stores pay, they set the reimbursement that drug stores get when they fill a prescription.

petra• 11 years ago

You could say so about so many mergers. The simple fact is that since the days of bush the son, there's much less anti-trust enforcement in the u.s. ,and you see it in many areas.

dragonwriter2• 11 years ago

I don't understand why this purchase was not turned down for on grounds of anti-trust.

For one thing, the deal was just announced. This happens before anti-trust scrutiny begins. Various sources have indicated that the deal is likely to be closely scrutinized by the FTC (though some predict it will be approved as-is). [0]

[0] http://www.reuters.com/article/2015/10/27/us-rite-aid-m-a-wa...

mc32• 11 years ago

A bigger Walgreens affords it more bargaining power against drugs/pharma companies, which could lead to them cutting drugs' cost to consumers. As it is now, there are times the Walgreens (and independents and the rest) have to swallow the bitter pill of drugs price adjustments because the reimbursement schedule does not adjust as drugs prices adjust. A drug they pay $10 for today might be $60 next week and if they want to keep their patients coming, which they do, most of the time they take the loss on those drugs --till the price schedule from the feds is readjusted.

arca_vorago• 11 years ago

That would be because antitrust and antimonopoly policies are all but forgotten and discarded. I don't have a paper to share, but my off the cuff analysis is that markets and industries acroos the board are in merger and aquisition mode, with a side of sellout and bankruptcy. Media is one of the best examples of this in my opinion.

Also, who would be responsible for such antitrust moves? DOJ? The legislative? Both are corrupt to the core, and don't think I'm not counting SCOTUS in that.

bane• 11 years ago

And Walmart and Costco and your local grocery and etc.

The problem with drug stores is they literally don't need to exist in most places anymore because there's so much overlapping competition.

Shivetya• 11 years ago

You do realize that there are so many sources of low cost drugs that the one thing holding back many is that no one has really put effort in to gathering all that data and making it easily accessible to the public.

most grocery chains, warehouse chains, and big box retailers, have pharmacies, all with heavily discounted drugs and some are even free. Since many have insurance they don't feel the effect so the drug stores stay in business as some don't like the idea of going to the grocery store for their medicine.

n0us4• 11 years ago

I did always love Rite Aid though Walgreens is good as well. CVS is the only one of that type of store that I routinely avoid. I wonder if Rite Aid and Walgreens will follow suit in not selling cigarettes anymore.

_RPM• 11 years ago

CVS at my college never had my drug, so i avoid them in order not have my time wasted.

itslennysfault2• 11 years ago

Out of curiosity... where did you grow up?

I grew up in Chicago (where Walgreens is from) and I routinely avoid CVS and shop at Walgreens if I have the choice. My girlfriend is from NY so she never saw Walgreens until her 20s so she avoids Walgreens and goes to CVS.

n0us4• 11 years ago

East Coast, Virginia. I actually didn't have Rite Aid until highschool but CVS mostly dominates in my hometown which is odd because everyone I know from every socioeconomic background prefers not to shop there.

bbarn2• 11 years ago

Odd. Chicagoan here too.. I find staff at Walgreens to be some of the most miserable employees I run into in the retail sector, whereas CVS employees generally try to be helpful and seem to not hate their life.

I think once you cross the white pharmacy curtain, regulatory concerns and negotiated insurance rates pretty much make them exactly the same, but the rest of the store.. I pick CVS since they took over Osco. I was an Osco loyalist too.. and totally pissed when that happened.

greggman• 11 years ago

Yes CVS sucks. I can't put my finger on why exactly. It just feels cheap. Like the paper bags they give me (which I have to pay for directly in California) are so thin as to be nearly unusable. They're like barely thicker than tissue paper making them not reusable.

I don't know if that's the only issue that set me off on CVS.

Walgreen annoyed me because they started replacing everything with their "NICE" brand which is about the lowest quality possible. That displaced brands of various things that were higher quality. I can't remember what I bought. Might have been cotton swabs (ie q-tips) because they stopped carrying q-tips and they were basically unusable. Plastic sticks that broke. Sticks that poked through the cotton.

I can only hope enough people care to either vote with their wallet or complain (I sent them a letter in the hopes to have some influence).

n0us4• 11 years ago

I agree with the cheap feeling. It seems like they either don't have what I'm looking for or they have a cheaper version. When they do have what I want it always seems to be one of the items that didn't pass QC but wasn't to broken/ruined to avoid selling.

davidf185• 11 years ago

Duane Reade has "NICE" brand as well now.

CVS is good for busy NYCers because of self-checkout. Really fast, no lines which is great. None of the other pharmacies have self-checkout and never hire enough clerks during the busy hours when people have time to go.

untog• 11 years ago

CVS not only feels cheap, it is cheap by comparison to the other drug stores. So I'm happy to go there.

stephengillie• 11 years ago

Wallgreens and Rite-Aid feel too corporate, too removed. Bartell's is much better.

n0us4• 11 years ago

I've never been to one. It feels irrational to put so much interest into particular drug stores but for some reason I refuse not to compromise.

bbarn2• 11 years ago

As a former smoker, current nicotine gum addict, I'm surprised CVS hasn't advertised its massive price difference on it and nicotine patches in addition to their not selling tobacco. I can buy (generic CVS branded) nicotine gum for half of what Walgreens branded generic goes for, in basically the same form factor, same strength, etc.

CyberDildonics2• 11 years ago

A 17.8 billion dollar deal yet every time I go in I'm asked to donate to 'the troops' which are not a charity to begin with.

hlmencken• 11 years ago

There are charities that support the troops

heroh• 11 years ago

all taxpayers are donors to the unwanted war

"the point of public relations slogans like support our troops is that they don't mean anything... you don't want people to think about the issue, that's the whole point of good propaganda..." - Noam Chomsky https://www.youtube.com/watch?v=G7DdWmWUa_8

CyberDildonics2• 11 years ago

%40 of the US federal budget goes to the military.

Beyond that broad number what do the charities do and how much of the donation goes to the things that impact troops' lives. Most charities have a dismal percentage of the money going to their cause.

digisign2• 11 years ago

I don't know much about Wallgreens, but didn't like how they've been opening stores across the street from RA here in Los Angeles, instead of the next deserving block.

Also hope they don't get rid of the Thrifty (drug store) ice-cream, it is one of the only places to get a decent scoop at a low price for families. Not to mention lots of good memories.

djloche• 11 years ago

The Thrifty ice cream was sadly overpriced these days at the RA I last went to. I could have bought a half gallon of ice cream at the grocery store right next door for the same price as two scoops at RA.

chipotle_coyote• 11 years ago

But you could probably have bought a half-gallon of Thrifty ice cream at RA for the same price or less as the grocery store. :) You're paying a big premium when you're buying it per-scoop.

I know part of Thrifty's original schtick was being low prices and still high quality, and if they were still keeping in line with that the price would be more like 50¢/scoop rather than $1.79 -- but AFAIK, the ice cream mostly went away after RiteAid bought the original Thrifty drug store and they've only started bringing it back over the last few years, at least in the SF Bay Area.

I do hope they keep the ice cream, though, just on general principle: the bigger retail chains get, the less character they seem to retain. It was sad for me to see CVS buy Long's Drugs a few years back -- Long's stores tended to be bigger and just a little more charmingly eclectic.

meritt• 11 years ago

Knowing these two companies, the transaction is going to be printed on a receipt with one line per share and a few hundred feet of legal disclaimers

sitkack• 11 years ago

When I write for the Onion I will do an article, "Comcast acquires itself, raises rates"

There is always more monopoly where that came from.

Walgreens announces deal to buy Rite Aid for $9 a share

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