Walgreens Sells PBM. Should CVS Follow?
A RetailWire poll in November 2006 asked whether
the CVS acquisition of pharmacy benefit manager (PBM) Caremark would make it
stronger in relative terms to rival Walgreens. Seventy-nine percent of respondents
said it would. Only five percent said it would make it weaker.
to this week’s announcement that Walgreens had agreed to sell its Walgreens
Health Initiatives PBM to Catalyst Health Solutions and the question has changed
to whether CVS needs to sell Caremark to focus on its retail business.
Lee, a Reuters Breakingviews columnist, wrote, "Since the
merger of the two, the Caremark business has lost some big enterprise contracts
and downgraded earnings projections. It’s also spent precious management
time explaining to enforcers at the Federal Trade Commission why the combination
Back to Walgreens, president and CEO Greg Wasson made
clear the reason behind the sale of Walgreens Health Initiatives.
"With nearly 7,700 drugstores as our center of gravity, we are focused
more than ever on delivering convenient, affordable, high quality pharmacy,
health and wellness solutions, and on enhancing our full scope of services
to become America’s first choice for health and daily living needs," Mr.
Wasson said in a press release.
- Walgreen shows rival chain CVS benefits of focus – Reuters
- Walgreen Co. to Sell Pharmacy Benefit Management Business to Catalyst Health
Solutions, Inc. – Walgreen Co.
- Walgreens to sell pharmacy-benefit unit – Chicago Tribune
Discussion Questions: What are your thoughts on Walgreens sale of its PBM? Should CVS sell Caremark?