Thursday, May 29, 2014

Drug Channels News Roundup, May 2014: CVS, WAG, Alliance Boots

Summer is almost here. Before you get out your grill, check out our monthly summary of noteworthy news stories that you may not have noticed. In this issue:
  • Yikes! Medi-Cal’s new limited network excludes CVS and Walgreens
  • ¡Híjole! Alliance Boots makes big pharmacy acquisitions in Mexico and Chile
  • No gooaaal! CVS Caremark fails to buy a second Brazilian drugstore chain…for now
In lieu of a humorous final story, check out a great Philadelphia Inquirer article about a non-profit that’s using mobile cell phone towers to build a vaccine cold chain in Africa. Very cool.

P.S. For daily updates on noteworthy news, follow @DrugChannels on Twitter.

Anthem Blue Cross Introduces Neighborhood Pharmacy Network for Medi-Cal Members
On May 1, 2014, Anthem Blue Cross launched Anthem Neighborhood Pharmacy Network, a narrow network for the roughly 857,000 Medi-Cal beneficiaries served by Anthem’s managed care plan. Click here to read the official provider bulletin. As far as I know, this is the first limited network for Medicaid beneficiaries. [UPDATE: It's not, as a reader comments below.] The network will include only half of the pharmacies in Anthem’s national network. Per the press release, a “majority of locations are small or independent pharmacies.” (Translation: No whining, please.) Other retail chains—Albertsons, Costco, K-Mart, Kroger, Pavilions, Raleys, Ralphs, Rite Aid, Safeway, Target, Vons, Walmart—comprise less than 50% of the network. Notably, the new network excludes the two largest drugstore chains—CVS and Walgreens. There’s no public information on pharmacies’ concessions for participating in this narrow network. Despite CMS, expect narrow networks to keep growing.

Alliance Boots To Acquire Two Major Retail Pharmacy Networks In Latin America
Wholesalers are not the only ones going global. In May, Alliance Boots acquired Farmacias Ahumada ("FASA"). The acquisition comprises two main businesses, which together operate over 1,400 stores, with combined revenues of around £835 million. Farmacias Benavides is the third largest retail pharmacy chain in Mexico with around 1,000 stores, and Farmacias Ahumada is one of the three largest retail pharmacy chains in Chile with around 400 stores. No word on whether Alliance Boots checked with Walgreens before the purchase.

Brazil Drugstore Firm Rejects $2 Bln Offer From CVS
CVS continues to look for international expansion. CVS Caremark was reportedly rebuffed in its attempt to buy DPSP, the third-largest Brazilian drugstore. CVS already owns Onofre, the eight-largest pharmacy chain in Brazil. (See CVS is going to Brazil!). Expect more global deals from CVS Caremark. Perhaps McKesson will spin off Celesio’s Lloyds?

A Lifesaving Chain, from Hollywood to Philadelphia
This article describes the formation of Energize the Chain, an visionary group with an innovative approach to a global cold chain for vaccines. In their words: “We intend to create an economically and technologically sustainable energy infrastructure for the effective transportation and storage of vaccines. As mobile phone coverage blankets the globe, harnessing the energy potential of telecommunication towers provides the means to achieve this infrastructure.” Most impressive.


  1. Adam: What do you mean when your reaction is "Yikes!"? So, the independents finally win one vs. CVS/Walgreens & this scares you? Why such a favorable bias towards the big box chains when their primary focus is to run every independent in this country out of business? So, when the independents can't compete any longer & go out of business...this you think will improve healthcare?

  2. I have no bias for or against big box chains. I meant "Yikes! Narrow networks are coming to Medicaid!"

  3. There are quite a few “narrow networks” in Managed Medicaid today. Amerigroup does it (and did it prior to their acquisition), as do other Medicaid Managed Care providers.
    Just letting you know as your comments today implied that Anthem’s was the first limited network in this population. They are actually late in the game! :)
    Please keep up the informative stories though, I enjoy reading them on a regular basis.

  4. Thanks for the info. I'll update the article.