Walgreens has purchased Rite Aid; but will it change the healthcare industry?
In an agreement that will continue to shakeup the rapidly changing healthcare industry, The U.S.-based drug retail chain Walgreens has agreed to purchase rival Rite Aid and its 4,600 locations for $9.4 billion.
The merging of the largest and third-largest drugstore operators in the U.S. comes at a time when pharmacies are struggling with the transforming healthcare industry, as retailers continue to search for bargaining power against companies offering clinical services.
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In addition, the agreement is transpiring less than a year after Walgreens completed its purchase of European health and beauty retailer Alliance Boots, which operates the largest drugstore chain in the UK. The partnership created Walgreens Boots Alliance Inc., which runs over 13,000 stores in 11 countries.
Although Rite Aid will keep its name for the time being, the combination of purchasing power and cost cutting will help Walgreens save over $1 billion in synergies. The deal will give Walgreens almost three times the number of pharmacies as Wal-Mart, and over 60 percent more outlets than rival CVS.
RELATED TOPIC: Walgreens completes acquisition of regional drugstore chain
However, with 15 percent of medical prescriptions in the U.S. being filled through mail rather than retail counters, Walgreens still won’t have the top spot in distributing prescription drugs despite having more stores than any other chain.
Meanwhile, CVS controls about 58 percent of the industry’s $263 billion of annual revenue, and $10.3 billion of profit. CVS acquired Target’s pharmacy business earlier this year for $1.9 billion with intentions of transforming over 1,600 locations into CVS pharmacies.
RELATED TOPIC: How hospitals are integrating Obamacare to reduce costs
The increasing amount of merger deals between drug companies, hospital chains and health insurers has reached $427 billion this year alone, which is largely due to the new healthcare outlook created by U.S. President Barack Obama’s Affordable Care Act.
In recent years, the pharmacy industry has been unable to use acquisitions to subdue the pressure on profit from lower reimbursement rates from both the federal government and health insurers.
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Dexcom: changing the lives of people with type 1 diabetes
It is estimated that 9.3% of adults around the world are living with type 1 diabetes, which amounts to a total of 463 million people. A further 1.1 million children and adolescents under the age of 20 are living with the condition.
Unlike the more prevalent type 2 diabetes, where the body still produces insulin and symptoms develop slowly, people with type 1 diabetes need regular insulin injections or pumps, and must monitor their sugar levels frequently.
In recent years a number of remote glucose monitoring systems have become available that patients can use at home. These work with a sensor, usually placed under the skin, that measures glucose levels every few minutes. This information is then transmitted wirelessly to a device like a smartphone or tablet, which can then be shared with their clinician.
British actress Nina Wadia's son Aidan, 14, has type 1 diabetes, and has been managing his condition using Dexcom, a glucose monitoring system used by patients all over the world. Here Wadia explains how Dexcom has improved their lives.
As a parent of someone with type 1 diabetes, what is your day-to-day life like?
Being able to take a breath, think and pivot constantly without getting frustrated becomes an essential mindset because sometimes it feels like each day is determined to be different from the day before. Whatever worked yesterday is going to misfire today.
Which areas of yours and Aidan’s life are most impacted by diabetes?
The one thing that you have to fight hard to reclaim is spontaneity, especially when it comes to food and exercise. It’s only when this is taken do you realise how essential each one is. You can be flexible and there are no real limits, but only in the sense that a great athlete can be flexible without limits because they’ve trained super hard to be that way. So we’ve all had to become athletes when it comes to being spontaneous.
How has Dexcom helped you and Aidan?
Dexcom has brought future science fiction to real life today. The continuous glucose monitoring system is tiny, sits discreetly on his body and gives him a ten-day breather between sensor changes, so it's goodbye finger-pricking seven times daily.
Dexcom is totally active at a grass roots level and for Diabetes Awareness has pledged to donate £2,000 if #DexcomDiabetesStories and/or #DexcomWarriorStories is shared 200 times! I’ll be sharing more on social media and would love to hear how other families are winning their fights.
Maybe most importantly Dexcom is trying to introduce a reimbursement programme for type 1 diabetes patients which will give greater access to modern, life changing hi-tech. I want to spread the word on the importance of accessing it through this campaign.
If you compared your life today with how it was before Aidan was using Dexcom, what has changed?
It's always working, which lets him take his mind off diabetes for longer stretches. It also lets me get off his back. We both receive alerts so I no longer have to pester him by asking him what his number is, and especially importantly, I don’t have to wake him at night to prick his finger if I’m worried. Dexcom gave us back our sleep!