WHAT IT MEANS AND WHY IT'S IMPORTANT “We don’t have to be the PBM.” That’s what Greg Wasson, Walgreens president and CEO, told Drug Store News in one interview last year, and it neatly encapsulates the dynamic that may be unfolding behind the scenes at the nation’s top pharmacy retailer.
(THE NEWS: Walgreens said to consider sale of PBM. For the full story, click here)
Walgreens reportedly is shopping out its pharmacy benefit management subsidiary, Walgreens Health Initiatives. Thus far, the company is mum about the possible sale of WHI, but divesting its PBM would make some strategic sense for a company whose mission has crystallized over the past two years around a new set of priorities: to become the nation’s go-to resource for retail and workplace health and pharmacy services.
Quite deliberately, Walgreens has pursued a different business model than that of its top drug store rival, CVS Caremark. Instead of building a combined pharmacy/PBM powerhouse to move market share and prescription business to its own stores, Walgreens has spent billions and devoted enormous human capital to remake itself as a fully integrated, full-service retail health-and-wellness solutions provider. Its message to employers and other health plan sponsors — and to other PBMs and managed care organizations, for that matter — is designed to appeal to their bottom lines as they grapple with ever-rising health costs for employees and plan members.
Walgreens’ message to the healthcare marketplace, boiled down to its essence, has a powerful appeal to cash-strapped benefits providers. It says, “We’re capable of delivering not only pharmacy and medication therapy management services to employers and other health plan sponsors in dire need of solutions, but also a wide range of other health services like on-site employer clinics, retail-based clinics, specialty pharmacy services, home infusion and home health care.” That’s why Walgreens markets itself not only as a chain of more than 7,560 drug store pharmacies, but also as a patient-focused national network of more than 8,000 accessible “points of care.”
With that kind of broad-service, integrated approach to health care, it would be no great surprise to see Walgreens’ focus shift away from operating a standard PBM model.