Walgreens and OptumRx partnership: more consolidation in retail pharmacy

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Partnership combines mail-order PBM with brick-and-mortar drugstores

Another tie-up in how drugs are provided to consumers is in the works, following the announcement that Walgreens Boots Alliance will now have a preferred relationship with OptumRx, a pharmacy benefit manager (PBM) that is part of Optum, which in turn is part of a leading insurer, United Healthcare.

Under the terms of the announced agreement, eligible OptumRx members will have the option to fill 90-day prescriptions at home delivery copay levels at any of Walgreens nearly 8,200 pharmacies nationwide or through OptumRx home delivery. They will also have access to Walgreens army of pharmacists, including 24/7 telephone support. OptumRx manages some 66 million covered lives.

In statements, OptumRx’s CEO Larry Renfro emphasized “integrating Walgreens industry-leading in-store pharmacy capabilities and convenient retail locations with OptumRx’s advanced pharmacy care services,” while Walgreens president, Alex Gourlay, noted that “OptumRx’s differentiated pharmacy care services model creating smarter health care connections will be a strong fit with the more than 27,000 Walgreens pharmacists.”

This partnership comes on the heels of OptumRx’s consolidation with another PBM, Catamaran, last year, while Walgreens is in the process of acquiring Rite-Aid, the No. 3 pharmacy chain. Going back farther in time, it’s a validation of the bold step CVS Health took in 2007 to merge with Caremark, a leading PBM; at the time, the merger was looked on critically since under a traditional perspective, mail order pharmacy competes with brick-and-mortar pharmacy. (CVS and Caremark now have a similar relationship in steering Caremark PBM members to CVS stores.)

Left out of the dance is Express Scripts, the largest PBM; there had been speculation that that company might have merged with Walgreens, and Wall Street greeted the news of the Walgreens-OptumRx partnership by knocking down Express Scripts’ stock price by a few percentage points.

For pharma, the partnership means even less competition between distribution channels, and bigger and more powerful trading partners to contend with (one recent example: Valeant Pharma, following its troubles with a closely connected specialty pharmacy, chose to designate Walgreens as a preferred retail partner late last year, and will discount products sold to Walgreens.) Left out of the announcement were details on how OptumRx’s and Walgreens’ specialty pharmacy relationships will work. Both Walgreens and OptumRx tout their abilities to gather and analyze patient data, which can be a boon to improved adherence programs, but also a farther-reaching means of tracking the comparative effectiveness of prescribed drugs.

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