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Walgreens to Takeover Rite Aid & Make Better Deals with Drugmakers

By Pharmaceutical Processing | October 28, 2015

(Photo credit: Anthony92931)Walgreens will use its $9.41 billion takeover of rival Rite Aid to spread its philosophy on making drugstores destinations for customers looking to stay healthy or buy beauty products.

The nation’s largest drugstore chain also is expected to flex its beefed-up negotiating muscle to wring better deals from drugmakers and other suppliers. But experts say those discounts won’t automatically trickle down to consumers.

In fact, customers may not see a huge impact on their wallets if the deal announced Tuesday evening goes through. But they will likely see some store closures or name changes and fewer brand choices after Walgreens Boots Alliance Inc. adds the nation’s third-largest drugstore chain to its portfolio.

They also may see more clinics in Rite Aid Corp. stores and more products like vitamins and supplements aimed at keeping them healthy, as the sector continues to stretch well beyond simply filling prescriptions.

Drugstores are shifting to serve the aging baby boom population and its health needs, as well as the growing number of people who are shopping around more for health care instead of simply visiting their family doctors. And they’re fending off competition from grocery chains and big retailers like Wal-Mart that have added thousands of pharmacies to their stores and offer steep discounts on some drugs.

The chain also will try to negotiate better prices on drugs, starting with generics, and consumers may start to see some breaks here. But prescription prices also can depend on insurance coverage and whether a drugmaker is motivated to lower its prices to fend off competition from competing treatments.

Walgreens and Rite Aid expect their combination to close in the second half of next year.

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