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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 said it would partner with pharmacy benefit manager Prime Therapeutics to reduce drug procurement costs...The companies will combine their central specialty pharmacy and mail order service businesses and introduce a new retail pharmacy network that will give Prime Therapeutics' customers access to Walgreens' pharmacy network...Walgreens...already has partnerships with PBMs such as Express Scripts Holding Co...and UnitedHealth Group Inc's OptumRx...Walgreens is also in talks to acquire Rite Aid Corp, which will give it ownership of Rite Aid's PBM, EnvisionRx...

…code-named ‘T-Rex’...Safeway Inc. spent about $350 million to build clinics in more than 800 of its supermarkets to offer blood tests by startup Theranos Inc…But the tests never began, the clinics are now used largely for flu shots and travel-related vaccines, and the two companies have been negotiating to officially dissolve their partnership…Safeway executives said Theranos missed deadlines for the blood-testing rollout…article reported that the proprietary lab instrument developed by Theranos as the anchor of its growth strategy handled just a small fraction of the tests sold to consumers at the end of 2014…also…some of the startup’s former employees were leery about the machine’s accuracy.

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...

CVS Health Corp. and Walgreens Boots Alliance Inc. were sued by California customers who accused the drugstore operators of charging co-payments for certain prescription drugs that exceed the cost of medicines...CVS...overbilled consumers who used insurance to pay for some generic drugs and wrongfully hid the fact that the medicines’ cash price was cheaper...Walgreens...used the same clawback tactic...The lawsuits follow at least 16 other cases...targeting drugstore chains’ alleged co-pay clawback practices. The clawback occurs when patients hand over co-payments set by a pharmacy benefit manager that exceed the actual cash cost of the drug. The benefit managers pocket the difference…Most patients never realize there’s a cheaper cash price because of clauses in contracts between pharmacies and benefit managers that bar the drugstore from telling people there’s a lower-cost way to pay...Schultz (Megan Schultz v. CVS Health Corporation, 17-cv-359, U.S. District Court for the District of Rhode Island)...contends that CVS’s clawback agreements with benefit managers such as Express Scripts, CVS Caremark and OptumRx violate federal racketeering and insurance laws and works to artificially inflate prescription costs...

Theranos Inc. filed a plan to U.S. regulators to fix serious deficiencies at the company’s blood-testing lab in Newark, California, as founder Elizabeth Holmes works to regain credibility for her struggling startup...The company submitted the proposed plan of correction...to the Centers for Medicare and Medicaid Services...Theranos also confirmed the filing, though it didn’t release details of the plan...CMS said in late January that Theranos’s violations of federal regulations posed "immediate jeopardy" to patients’ health and safety...Walgreens Boots Alliance Inc. and...Capital BlueCross have said they’re curtailing use of Theranos’s tests while the shortcomings identified by CMS are addressed. Theranos has hired a new lab director and said it’s working quickly to correct other problems, including personnel issues, along with the defects tied to blood testing...

Work to begin in early 2016…Walgreens is poised to roll out Epic EHRs (Care Everywhere) in its more than 400 healthcare clinics across the country…The Epic platform will replace Walgreens' own proprietary EHR…The goal…is to...enable more seamless communication with health systems and local providers, and gives us enhanced capabilities to deliver better health outcomes through greater care coordination and interoperability…our clinics play an increasingly important role in healthcare, supporting the healthcare system, provider practices and patients' medical homes, care coordination can be critical. This will benefit our patients, clinic providers and partners, and serves as an instrumental part of our strategic growth plan…

The largest U.S. retail pharmacies, including Wal-Mart Stores Inc and Walgreens Boots Alliance Inc, are wielding more leverage when buying generic drugs, accelerating a decline in prices likely to affect drug companies for some time...That pressure is exacerbated by efforts from U.S. health regulators to speed approval of copycat drugs...The extent of the shift became clearer this week, when wholesale drug distributors Cardinal Health Inc and AmerisourceBergen Corp, as well as top global generic drugmaker Teva Pharmaceutical Industries Ltd, warned of generic price declines of as much as 9 percent through the end of the year…Walgreens formed a drug-buying partnership with AmerisourceBergen in 2013, and earlier this year partnered with pharmacy benefit manager Express Scripts Holdings Co. Retailer CVS Health Corp has tied up with Cardinal Health and, more recently, Wal-Mart has joined with McKesson Corp to source generic drugs. Industry analysts said the alliances took some time to become effective, but their power over negotiations is becoming clear.

Federal inspectors will soon release details on problems at blood-testing facility...U.S. health inspectors have found serious deficiencies at Theranos Inc.’s laboratory in Northern California...The problems were found during an inspection by the Centers for Medicare and Medicaid Services, the chief federal regulator of clinical labs, at the blood-testing company’s facility in Newark, Calif. Failing to fix the problems could put the Theranos lab at risk of suspension from the Medicare program...inspection results are expected to be publicly released soon...

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.