Walgreens Executive Summary

Walgreens sold Walgreens Infusion Services business that provides non-hospital infusion services. They also sold their majority stake in its Take Care Employer Solutions (TCES) subsidiary. Walgreens and Alliance Boots in 2013 partnered with pharmaceutical wholesaler AmerisourceBergen to buy branded and generic prescription drugs from the supplier for the next 10 years. They also acquired the right to purchase a minority stake in AmerisourceBergen thus giving them supply chain opportunities (Christian, 2015).

With the rising in healthcare expenditure, it will provide a greater opportunity for Walgreens to continue to generate revenue. Healthcare expenditure in the US is expected to rise 6.1% according to the US government Center for Medicare and Medicaid Services (CMS). It is predicted that, National Health expenditure increases, Gross Domestic Product (GDP) is expected to reach 19.9% in 2022 from 17.9 % in 2011. According to the Congress budget office, if healthcare spending continues at this pace, cost will increase from the current 16% of GDP to 25% in 2025 (Walgreen Co., 2014).

Walgreens recently announce it’s intention to purchase Rite Aid, which is ranked number three behind CVS Caremark. Currently, CVS Health has 58% of the market, while Walgreens and Rite Aide have 31% and 10.3% respectively. If this acquisition goes through, Walgreens will have a combined entity worth $130 billion in annual sales. They will have 13,000 stores and will hold 41.3% of the pharmacy market share. This will consolidate the pharma retail industry with only two huge retail chains, thereby turning the US drugstore market into a duopoly. (Bells,