Today’s news means big business where your health is concerned: Walgreens is acquiring Rite Aid for $9.4 billion. Yep, you read that right. So, what does this story in health news mean for you ? Here’s what you can expect from the Walgreens-RiteAid acquisition:
With the Walgreens-RiteAid acquisition, one of the first actions will result in closed stores. As an attempt to cut costs, Walgreens will shut down many of the current Rite Aid stores. It’s not been disclosed how many RiteAid locations will be shut down, but my prediction is that it will be a noticeable chunk. Brick and mortar stores have a high overhead cost, and the Walgreens-RiteAid acquisition will mean Walgreens has to take on heavy debt. This debt will have to be paid and returned with profit, and shutting down high overhead costs will be one of the first decisions Walgreens makes. If you have RiteAid locations near you, you can expect that they might be one of the ones to go. But, on the bright side, it seems there’s a Walgreens location on every block, right?
The Walgreens-RiteAid acquisition is particularly noteworthy because Walgreens will now have over 50% ownership in pharmacies within the U.S. Walgreens currently holds the number 1 spot in the industry, over CVS. But the acquisition takes out the number 3 competitor within the states. With Walgreens acquiring over 4,000 of current RiteAid stores, they now have domination over CVS, with well over half ownership in pharmacies. Even if (or should I say when?) Walgreens closes down some of the current RiteAid locations, they will still own a large percent more store locations than CVS.
With the Walgreens-RiteAid acquisition comes decreased competition. Don’t get this wrong-healthcare is a business. You currently choose which doctor to go to, what hospital (in most cases), which pharmacy to fill your prescription, and so on. But this acquisition gives you far less choice. If you have RiteAid near you, you now don’t have that option. And, locally owned pharmacies are becoming harder to come by-how can they compete with these big box pharmacies? This decreased competition should matter to you. Why? In its simplest explanation-decreased competition means increased prices. The Walgreens-RiteAid acquisition means that you now have to choose between the prices of just CVS and Walgreens. They will be in a price war, especially now that CVS will have to fight for any market leadership they once had. Now, there still are drugstores and pharmacies within the grocery stores (Target, Fry’s, and even Walmart) but I know that there is a large percentage of you that don’t even consider the drugstores for your pharmacy needs. Maybe now you will, in order to increase your options?
My biggest concern with this acquisition is the increased regulation that seems preeminent. Because this Walgreens-RiteAid acquisition gives Walgreens over 50% of the market, government regulation may come into effect. Healthcare already faces heavy regulation with Obamacare. And more regulation seems to limit the freedoms you have to choosing your healthcare. If the government becomes more involved with regulating healthcare within the marketplace, will it burden consumers even more? Probably. Increased government regulation would mean Walgreens has to listen to the government over what your consumer needs/wants are. And when it comes to your health, if they aren’t listening to you, you could suffer.
The Walgreens-RiteAid acquisition is big news. And I think it’s important to consider what this health news will mean for you and your family. Although Walgreens is a great company, offering healthcare options such as the minute clinic, there are concerns to be had with this acquisition. If you care about your health, maybe you see some of these concerns as I do? It’s good to have options when it comes to your healthcare. And this Walgreens-RiteAid acquisition seems to take a lot of the options out. I know that being healthy can be expensive, and a burden at times. And I believe YOU deserve to have choices to make the best healthcare decisions for yourself. I have hope that healthcare can be better. Innovation with companies like Theranos provide more options for your healthcare in a private sector. Let’s share our voice and hope that we can continue to see positive changes in healthcare with more options that provide value at an affordable price!
I would love to hear your thoughts on the Walgreens-RiteAid acquisition and other health news! What do you think of the acquisition? Do you think this might have an impact on you and your healthcare choices?