- Four Fun Facts About the Walgreens-Rite Aid Merger Agreement (drugchannels.net)Sec. and Exch. Com. Form 8-K AGREEMENT AND PLAN OF MERGER Among WALGREENS BOOTS ALLIANCE, INC., RITE AID CORPORATION (files.shareholder.com)
Late last week, Walgreens Boots Alliance filed an 8-K with the full text of its merger agreement with Rite Aid….The document containing the Agreement and Plan of Merger weighs in at a hefty 137 pages. Below, I highlight four fun facts about the deal’s timing, its termination fees, and what the companies will do to achieve antitrust approval.
- The deal must be completed before Halloween 2016.
- If Rite Aid backs out of the deal, then it owes as much as $370 million to Walgreens Boots Alliance.
- WBA could owe Rite Aid a termination fee as large as $650 million.
- To get the deal approved, WBA is willing to dump as many as 1,000 stores.
- Walgreens Store Sales Seen as Hurdle for Rite Aid Approval (bloomberg.com)
Walgreens Boots Alliance Inc.’s deal to acquire Rite Aid Corp. is expected to draw antitrust scrutiny not only because the company would grow to 12,700 locations, but because of what goes on behind the scenes with drug payments…Federal Trade Commission…will look closely at whether the merging of the No. 1 and No. 3 pharmacy chains in the U.S. will lead to higher prices for prescription drugs...the FTC will probably review the approximately $9.4 billion deal market-by-market instead of on a national basis, since CVS, Walgreens, Wal-Mart and Rite Aid together control only about half of the U.S. retail pharmacy market...The rest is held by independent stores, smaller chains and mail-order companies. Walgreens is likely to sell or shutter some stores...
- Cancer Drugs Driving 340B Growth Even More Than Understood, Report Finds (ajmc.com)In Conversation With an Oncologist: 340B and Its Impact on the Community (ajmc.com)
The discount drug program intended for safety-net hospitals and special AIDS clinics has mushroomed even more than earlier reports have suggested, with oncology drugs fueling much of the growth,…Medicare Part B hospital outpatient spending shows that 340B institutions accounted for 58% of all spending on drug payments in 2013, with oncology drugs making up 40% of the Medicare fee-for-service costs. Cancer drugs have become "the pot of gold at the end of the rainbow," for 340B hospitals,… it’s too easy for hospitals to qualify for the program, and hospitals have powerful financial incentives to buy up oncology practices, so these financial strategies can proliferative at sites beyond the hospital walls.