Walgreens bets on expanded specialty drug business
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Even as Walgreens sheds major costs, the company is going big on its specialty drug business.
The big picture: The company said Thursday it will roll its specialty pharmacy assets under a new brand and will launch a new service helping manage the high costs and delivery of new cell and gene therapies.
- Walgreens is in the middle of a $1 billion cost-cutting initiative, which includes closure of 160 VillageMD clinics, while looking to grow certain parts of its health care business, such as specialty pharmacy and value-based care.
- Thursday's announcement comes just months after Bloomberg reported that Walgreens was considering selling off a major part of its speciality pharmacy business.
Zoom in: Specialty drugs are among the costliest on the market — ranging from tens of thousands of dollars to several millions — and account for roughly half of U.S. spending on prescription drugs.
- Specialty pharmacies can help educate patients about how to take these drugs and manage side effects, improving medication adherence and outcomes — and saving health plans money.
Driving the news: Walgreens said the combined unit, known as Walgreens Specialty Pharmacy, will be a $24 billion business that includes specialty and home delivery brand AllianceRx.
- It will also open an 18,000-square-foot Gene and Cell Services Pharmacy and Innovation Center in Pittsburgh, which will have the ability to manage supply chain, logistics, financing and clinical support for the emerging therapies.
Walgreens said a key differentiator for its specialty pharmacy business is that the company isn't tied up with a pharmacy benefits manager, giving it more flexibility with insurers and drugmakers.
- "We can partner directly with pharmaceutical manufacturers to facilitate products to market, including limited distribution drugs, and coordinate closely with providers to ensure patients experience a smooth start to treatment," Walgreens chief pharmacy officer Rick Gates said in a statement.
