“For too long, corporate businesses have treated Black, brown and working-class communities essentially as though we are second-class citizens,” councilor Tania Fernandes Anderson said in a statement, per the outlet.
This week, Walgreens announced it would close three pharmacies in Boston neighborhoods Hyde Park, Nubian Square, and Mattapan. It will leave people in those areas in a “pharmacy desert,” NBC Boston wrote.
It is likely part of an ongoing strategy by Walgreens and competitor CVS to shutter retail locations, even as both chains get further into providing clinical care. In November 2021, CVS announced it would shut down 900 stores over a three-year period because of shifting consumer spending habits.
In 2019, Walgreens announced it would close some 200 stores. Economic headwinds this year could even have sped up some such plans.
But it still leaves people who need prescriptions in the lurch. “There’s not one locally to where I live so it would mean going across town to Quincy,” Kiera Mahoney of Mattapan told NBC Boston.
“In the Black neighborhood, they are just closing everything. Some of us [don’t] have transportation, some of us have to look for transportation now, especially the elderly, and I am elderly,” Ernell Trench, a senior living in the neighborhood, told WCVB.
The pharmacies were closed in areas that are “overwhelmingly Black and Hispanic communities,” according to The Boston Globe.
Walgreens did not reply immediately to a request for comment but said in a statement to WCVB that wants to create “the right network of stores in the right locations.”
“When faced with the difficult task of closing a particular location, several factors are taken into account, including things like the dynamics of the local market and changes in the buying habits of our patients and customers, for example,” the company added.
The Boston council passed a (non-binding) resolution that asked Walgreens not to open any more stores in the area unless it delayed closing these three locations.
“What is occurring here seems to be a present-day manifestation of the embedded economic inequality that we still suffer from,” Fernandes Anderson also said.
A billionaire sports team owner wants to cut the cost of American prescriptions. Should the big drug chains check their pulses?
Mark Cuban, owner of the Dallas Mavericks and a long-time Shark Tank investor, in January launched his price-popping discount e-pharmacy, Mark Cuban CostPlus Drug Co. (Yeah, you need a glass of water to swallow that name, so let’s refer to it as CostPlus Drug.)
At the time, news outlets like The Street suggested Cuban was taking on the retail heavies – CVS, Walgreens WBA , Rite Aid RAD and even newbie Amazon Pharmacy. His goal: to offer lower-priced generic drugs and “shield consumers from inflated drug prices,” according to a company statement. (CostPlus’s website is operated by online healthcare company Truepill.)
New Age In Medicine: The Pluses And Minuses Of Rx
Now, 10 months later, we’ve had time to examine the extent to which Cuban’s low-priced option is affecting sales at big retail pharma, and across the industry. He is, after all, competing not only with retailers, but also with price-cutters, such as Amazon Pharmacy and Good Rx.
(Photo by Scott Olson/Getty Images)
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Here is a breakdown of how these drug-store alternatives make a buck, and save a buck.
How CostPlus Works
CostPlus is a registered pharma wholesaler, so it can bypass the markups retailers typically make because it doesn’t have to cover overhead costs. It charges the manufacturer’s price for a generic drug, plus a 15% flat margin, a $3 pharmacist fee and $5 shipping, according to CNET. So a drug that sells for $10 wholesale is calculated at $19.50, all in. CostPlus now offers nearly 800 drugs (from 100 at launch) and serves more than a million people, Katie Couric reports.
What distinguishes CostPlus is that it avoids pharmacy benefit managers (PBMs). These are companies that aggregate a medication’s demand and then negotiate fees with pharmacies and drug manufacturers. Instead, CostPlus created its own PBM, pledging it will be “radically transparent” in negotiating its prices. (This is a dig: PBMs have been criticized for pocketing negotiated savings and for charging Medicaid more than what the PBMs pay to pharmacies.)
How Good Rx Works
Unlike CostPlus Drug, GoodRx’s revenue comes primarily through PBMs, according to its initial public offering. However, GoodRx targets a specific niche – consumers who choose to buy prescriptions outside of insurance. Many of these consumers, insured and uninsured, don’t fill their prescriptions at all because of high deductibles or prices.
By targeting these customers, GoodRx increases the number of cash transactions for PBMs, expanding their markets. So when a patient uses a GoodRx code, a PBM receives a portion of the payment and GoodRx then collects a fee from the PBM. GoodRx also makes money from advertising and referral fees, its website states. Who are the big PBMs? The three leaders are Caremark/CVS Health, Express Scripts (Cigna CI ) and OptumRx (United Health), according to the pharma economics site Drug Channels.
Note, GoodRx is one of several Rx discount card providers, including SingleCare.
How Amazon Pharmacy Works
Amazon Pharmacy’s money-making advantage is rooted in its Prime Memberships, which accounts for nearly 60% of the U.S. population (or 152 million subscriptions), according to Insider Intelligence. For drug makers, that’s a lot of volume.
Members can compare prices and determine the cost of a prescription if paying with insurance or using Amazon Pharmacy’s discount card. That savings card cuts up to 80% off generic prescriptions and 40% off brand-name medications (when paying without insurance). Prime members also can get these savings at 50,000 participating pharmacies by using Amazon’s prescription savings card – similar to GoodRx and other discount card providers.
The key distinguishing feature is that Prime members get free two-day shipping. Non-Prime members can use Amazon Pharmacy with free five-day delivery.
Where And How Drug Store Chains Compete
Are traditional drug retailers suffering the side effects of Mark Cuban’s high-cost elixir? In August, U.S. pharmacies and drug stores filled more than $28.1 billon in prescriptions, according to the U.S. Census Board. That compares with $24.5 billion in August 2020 and – to go way back for context – $6.3 billion in 1992.
These rising figures probably represent a combination of prescription volume as well as price surges, so the cost isn’t edging down yet. What matters more for this analysis, however, is the extent to which growth in Rx fulfillment resulted from the expansion of lower-priced channels, such as CostPlus’s direct-to-consumer model.
Were sales diverted from the big three drug chains? Here is how they are doing so far this year:
CVS in August reported a $7.6 billion sales gain in its Pharmacy Services Segment for the first six months of this fiscal year. That’s up 10.3% over the same period in 2021. CVS did not break out online pharmacy orders in its quarterly report, but in the first quarter of fiscal 2020, it realized a 1,000% increase in online prescriptions, according to Digital Commerce 360.
Walgreens, however, in October reported an 8.8% decline in its fiscal fourth quarter U.S. pharmacy sales. Interestingly, it blamed the drop on a 10 percentage point decline in its AllianceRx Walgreens business, its specialty and home-delivery pharmacy service.
Rite Aid in September said sales in its Retail Pharmacy Sector declined by 1.1% in the fiscal second-quarter. This was due to a reduction in Covid vaccine and testing revenue, as well as store closures. A rise in other prescriptions, however, offset the decline, indicating a possible net gain without the Covid factor.
Regardless of the one-time comparisons, these chains do offer something an online billionaire cannot: one-to-one care. Most have supplemented their pharmacy services with medical, dental and even behavioral health services. Their customers choose to make trips to the bricks because they can meet with retail care professionals more quickly and conveniently than they could with a physician at a traditional practice.
Could the high cost of prescriptions eclipse the lure of such convenient service? The prospect definitely needs to be addressed. Ideally, retailers will recognize CostPlus’s purpose, and CostPlus in turn will see the value of what retailers are providing. And customers, ultimately, will benefit from the getting-better practices of both.
CVS, Walgreens and Walmart – the nation’s three largest retail U.S. pharmacies have agreed to pay … [+] $12 billion in a massive global settlement to resolve claims they contributed to the opioid epidemic, according to media reports Nov. 1, 2022. This Aug. 29, 2018, photo shows an arrangement of prescription Oxycodone pills. (AP Photo/Mark Lennihan)
Copyright 2018 The Associated Press. All rights reserved.
CVS, Walgreens and Walmart – the nation’s three largest retail U.S. pharmacy chains — have agreed “in principle” to pay $12 billion in a massive global settlement to resolve claims they contributed to the opioid epidemic.
Bloomberg News was the first major news outlet to report Tuesday night that CVS Health, Walgreens Boots Alliance and Walmart have “tentatively agreed to pay more than $12 billion to resolve thousands of state and local government lawsuits accusing the chains of mishandling opioid painkillers.” Bloomberg cited “people familiar with the matter” as its sources on the settlement.
The U.S. Centers for Disease Control and Prevention estimates the nationwide opioid crisis has led to more than a half million deaths from overdose in the last 20 years. Walmart, CVS and Walgreens combined have more than 23,000 U.S. pharmacies.
None of the U.S. drugstore chains reached Tuesday night agreed to comment on the reports or a proposed settlement. CVS is scheduled to report its third quarter earnings on Wednesday when more details of its share of the potential settlement could be disclosed.
According to reports and sources close to the companies, CVS is expected to pay $5 billion, Walgreens about $4 billion and Walmart will pay $3 billion. The settlement still has to be agreed to by the states, counties and other government entities involved in the discussions and who stand to reap the payouts.
But none of the retail pharmacy chains are admitting to wrongdoing, according to sources close to the company and media reports Tuesday night.
Investigations by state and federal attorneys as well as lawyers in private practices representing families of opioid victims have cited the role of distributors and pharmacies in the epidemic. A 2019 investigative report in the Washington Post said Walgreens “handled nearly one in five of the most addictive opioids” at the peak of the crisis surrounding the painkiller and acted as its “own distributor.”
Walgreens Boots Alliance and CVS Health aren’t done gobbling up primary care and related outpatient … [+] assets even after spending billions of dollars in the last two years. In this photo is a primary care center operated by VillageMD, which Walgreens has invested $6 billion in.
Walgreens and VillageMD
It appears Walgreens Boots Alliance and CVS Health aren’t done gobbling up primary care and related outpatient assets even after spending billions of dollars in the last two years.
The latest report on merger and acquisition activity came over the weekend from Bloomberg News which said VillageMD, a primary care company Walgreens has invested $6 billion in, is looking to merge with Summit Health. Primary care provider Summit Health merged with CityMD in 2019 to create a company with more than 1,400 healthcare providers that offer primary, specialty and urgent care.
Walgreens last year invested another $5.2 billion into VillageMD to escalate the rollout of hundreds of doctor-staffed clinics at its drugstores under its fast-growing “Walgreens Health” business. That investment gave Walgreens a stake of more than 60% in VillageMD.
Meanwhile, CVS Health has been doing some wheeling and dealing of its own. Most notably, CVS two months ago beat out Amazon and other companies for the home care company Signify Health for $8 billion. In buying Signify Health, CVS Health is adding to its growing menu of healthcare services that includes more than 9,000 retail drugstores, 1,100 MinuteClinics staffed by nurse practitioners and the nation’s third largest health insurer, Aetna.
But CVS, which is expected to provide an update on its ongoing healthcare expansion strategy later this week when it discusses its third quarter earnings, has told Wall Street analysts and investors it also wants to add to its primary care assets.
“We can’t be in primary care without M & A,” CVS chief executive Karen Lynch told analysts in August during the company’s second quarter earnings call. “We are being very disciplined both strategically and financially.”
Some have mentioned CVS as possibly interested in purchasing Cano Health, but those reports have died down lately.
Meanwhile, Lynch has said the company will “enhance our health services in three categories: primary care, provider enablement and home health.”
Walgreens Boots Alliance is buying the rest of the post acute and home care company CareCentrix for … [+] $392 million, the company said October 11, 2022. In this photo is a Walgreens store on April 02, 2019 in Miami, Florida. (Photo by Joe Raedle/Getty Images)
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Walgreens Boots Alliance is buying the rest of the post acute and home care company CareCentrix for $392 million.
The nation’s largest drugstore chain Tuesday said it has “entered into a definitive agreement to acquire the remaining 45% stake for approximately $392 million.” CareCentrix coordinates care to the home for health plans, patients and medical care providers and is a key part of the Walgreens Health strategy unveiled by chief executive Roz Brewer last year.
“We continue to see strong results and potential for growth from our partnership with CareCentrix,” Brewer said Tuesday. “Our full acquisition further accelerates our transformation to become a consumer-centric healthcare company, leveraging innovative platforms that extend our capabilities into fast-growing segments of healthcare. CareCentrix is key to offering services to our patients at every stage of the care continuum, and to driving long-term, sustainable growth as part of our U.S. Healthcare strategy.”
The acquisition is the latest sign that retail healthcare providers like CVS, Walgreens, Walmart and Amazon are looking to further serve the outpatient needs of U.S. consumers. The acceleration of the full acquisition of CareCentrix comes a month after Walgreens rival CVS Health announced it would acquire home care company Signify Health for $8 billion, beating out Amazon and others for the company.
In CareCentrix, Walgreens is acquiring the rest of a company that manages care for more than 19 million members at more than 7,400 provider locations, the companis said. CareCentrix offers “a suite of services on an integrated basis to support home care models – including home nursing, durable medical equipment, home infusion and in-home palliative care,” Walgreens said. In Walgreens fiscal year 2021, CareCentrix “delivered pro forma sales of $1.5 billion.”
CareCentrix will continue as a distinct business and brand within Walgreens following the full acquisition and CareCentrix chief executive officer John Driscoll will take on the new role as executive vice president and president, U.S. Healthcare at Walgreens Boots Alliance.
