Pharmaceutical retailer Walgreens and UK partner Alliance Boots ink an agreement with drug wholesaler AmerisourceBergen
April 2, 2013
Pharmaceutical retailer Walgreens, with European joint venture partner Alliance Boots has inked an agreement with drug
wholesaler AmerisourceBergen, one of North America’s largest pharmaceutical services companies.
The US $400 billion (AUD $383 billion) partnership will extend Walgreen’s existing relationship with AmerisourceBergen to ten years, creating one of the largest, most influential global pharmaceutical supply chains.
Walgreens, already the largest drug retailing chain in the US, took a 45 percent stake in Alliance Boots, based in the UK as part of a three year merger.
Alliance Boots was formed in 2006 through a merger of the British high street pharmacist Boots Group and the pan-European wholesale and retail pharmacy group Alliance Unichem.
It has locations in 25 countries and its operations are split in three areas – health and beauty retail, pharmaceutical wholesaler and contract manufacturing.
Meanwhile, in its attempt to expand, AmerisourceBergen, based in northern US, acquired World Courier, a global specialty logistics provider in clinical trials.
As part of the new agreement, AmerisourceBergen will expand its services to include distribution of branded and generic pharmaceuticals to Walgreen’s 11,000 plus retail stores, mail order and specialty pharmacies.
Daily deliveries of drugs will also be provided to Walgreen’s stores, reducing inventory in Walgreen’s existing warehouses.
This will replace Walgreen’s own network which it distributed more than 80 percent of its own drugs.
While Walgreen will benefit from primary distribution services offered by AmerisourceBergen, the latter will access generics and related pharmaceutical products through the recently established Walgreens and Alliance Boots joint venture.
Dubbed Walgreens Boots Alliance Development GmbH, this arrangement
is a global platform designed to make it easier for manufacturers to bring products to market, improve access to pharmaceuticals for health care providers worldwide and yield compelling new offerings to community pharmacies.
Walgreens will also benefit from AmerisourceBergen’s expertise in its specialty and manufacturer services businesses, as well as its wholesale distribution to health systems across the US.
Alliance Boots’ strong international expertise in pharmaceutical wholesaling and distribution also opens avenues for collaboration on new projects and services.
“Today’s announcement marks another step forward in establishing an unprecedented and efficient global pharmacy-led, health and wellbeing network, and achieving our vision of becoming the first choice in health and daily living for everyone in America and beyond,” says Walgreens President and Chief Executive Officer Gregory Wasson.
“We are excited to be expanding our existing relationship with AmerisourceBergen to a 10-year strategic long-term contract, representing another transformational step in the pharmaceutical supply chain.
“We believe this relationship will create a wide range of opportunities and innovations in the rapidly changing US and global health care environment that we expect will benefit all of our stakeholders.”
The three companies have also agreed to collaborate and share best practices to provide manufacturers with integrated solutions for global clinical trial logistics and “innovative” global 3PL services.
The partnership will also enable Walgreens and Alliance Boots the right to invest up to 23 percent in AmerisourceBergen.
Eyefor transport writer Cathy Morrow Robertson reports each of the companies hope to provide a force “able to negotiate pricing with manufacturers and pass those costs on to consumers world-wide”.
“Partnerships such as this are likely to not only increase due to rising costs and increasing government regulation, but they are also likely to increase competition with global logistics providers such as DHL and UPS,” Morrow Robertson writes.