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Shares of drug retailers Walgreens Boots Alliance Inc, CVS Health Corp and Rite Aid Corp tumbled on Friday after reports that Amazon.com Inc was looking to make a move into selling drugs online...Amazon is reported to be in discussions with mid-market pharmacy benefit managers and has been hiring talent to assess the drug retailing market for its entry…We are convinced that AMZN will almost certainly enter the drug distribution value chain within 2 years, evolving into a more disruptive offering over time...Amazon’s entry into pharmaceuticals has been long rumored in the media...Shares of drug retailers Walgreens closed down 5.8 percent, Rite Aid 4.9 percent and CVS Health 4.9 percent.

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...

Walgreens Boots Alliance Inc. agreed to acquire Rite Aid Corp. for about $9.4 billion in cash… The…deal…would combine the second- and third-largest drugstore chains in the U.S., with a total of about 12,800 locations, helping Walgreens vault past market leader CVS Health Corp. The acquisition will… will produce more than $1 billion in savings from cost overlaps…the deal is valued at $17.2 billion… Rite Aid shares fell 8.1 percent to $7.97 at 9:55 a.m. in New York, below Walgreens’ offer of $9 a share, reflecting speculation that the transaction will face antitrust scrutiny…Walgreens shares slumped 6.6 percent to $88.90. The deal creates financial savings but does little to change the drugstore chain’s strategic position in the rapidly evolving health-care industry…

Rite Aid Corp. has begun offering Harmonyx Diagnostics genetic testing for medications, making it the nation’s first drug chain to provide the service…Rite Aid said…that the self-administered oral swab test — available in all of its pharmacies…helps patients determine the efficacy of their prescription medication based on their genetic makeup…Patients can buy the test kit at any Rite Aid…In the pharmacy, patients then swab inside their cheek, and then a Rite Aid pharmacist takes the sample and returns it to Harmonyx for processing. Harmonyx provides a state-licensed physician to review each patient’s test, and detailed results are sent to the pharmacist and the treating doctor. The results are received as soon as 24 hours after the laboratory receives the test, according to Rite Aid.

Wow. Walgreens Boots Alliance is acquiring Rite Aid. As I told The New York Times: “The pharmacy consolidation endgame has begun.”…Given the consumer angle, the deal has been widely covered.

Here are two significant news reports that outline the transaction’s high points:

• Walgreens to Buy Rite Aid for $9.4 Billion in The New York Times
• Walgreens, Rite Aid Unite to Create Drugstore Giant in The Wall Street Journal

..here are the surprisingly skimpy official company documents:

• Press release…
• Fiscal year end 2015 and 4Q earnings conference call (See page 19.)

The deal was not a total surprise. In April, I asked Will Walgreens Boots Alliance Buy Rite Aid?

1. WBA is doubling down on retail pharmacy.
2. Surprisingly, WBA is claiming that mega-scale with payers did not drive the deal.
3. Envision Rx is a learning opportunity, not a strategic driver.
4. The FTC will approve the deal.
5. The deal adds even more complexity and opacity to WBA.
6. It’s good for AmerisourceBergen, but horrible for McKesson.
7. Wholesaler outsourcing will make integration easier.
8. WBA will (probably) proceed with its ABC warrants.
9. All hail our global channels overlord.
10. Big deals beget more deals.

To celebrate American Pharmacist Month, Rite Aid Corp. has launched its annual "Vote for Your Favorite Pharmacy Team Member Contest."…which runs to Oct. 31, gives customers a chance to win $2,500 in Rite Aid gift cards by nominating a favorite member of their Rite Aid pharmacy team...Now in its 12th year, the contest is designed to recognize Rite Aid pharmacy associates — including pharmacists, pharmacy technicians, pharmacy managers, pharmacy cashiers and Wellness Ambassadors

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.

1. The deal must be completed before Halloween 2016.
2. If Rite Aid backs out of the deal, then it owes as much as $370 million to Walgreens Boots Alliance.
3. WBA could owe Rite Aid a termination fee as large as $650 million.
4. To get the deal approved, WBA is willing to dump as many as 1,000 stores.

Two influential  senators called for close scrutiny of Walgreens Boots Alliance Inc's plan to buy Rite Aid Corp for $9.4 billion, a deal that would unite two of the three biggest U.S. drugstore chains...Walgreens Chief Executive Stefano Pessina said the company had analyzed the antitrust aspect of the deal but would not speculate on the number of drugstores it might need to divest in order to win regulatory approval...The top two antitrust lawmakers in the Senate...urged antitrust enforcers to give the plan careful scrutiny because of the importance of healthcare in the U.S. economy..."I have fought tirelessly to promote competition in the health sector and I believe the proposed merger of two of the three largest drug store chains in the country raises serious issues," Senator Amy Klobuchar...on the Senate Judiciary Committee's antitrust subcommittee...subcommittee's chair...Senator Mike Lee, said he hoped antitrust agencies would "closely scrutinize" the deal....

..benefits for the estimated 9.6 million users of the Pentagon’s Tricare health system and resulting profits for retail drugstores including those run by CVS Health Corp., Walgreens Boots Alliance Inc. and Rite Aid Corp…Senate negotiators are supporting an Obama administration plan to increase co-payments for military retirees and families over 10 years, while House conferees oppose passing on so much of that cost to veterans.