Walgreens looks at buying out AmerisourceBergen: WSJ

Walgreens Boots Alliance is reportedly looking at buying out wholesaler AmerisourceBergen, which in addition to its traditional drug warehousing and sales has specialty services. (Eric Palmer)

Pharmacy giant Walgreens Boots Alliance, which already owns a quarter of drug wholesaler AmerisourceBergen, may want it all.

Citing unnamed sources, the Wall Street Journal reported that “representatives” of the CEOs have discussed the possibility but emphasized that no deal is on the table and the discussions may lead nowhere. Neither company would comment.

AmerisourceBergen has a market value of almost $20 billion.

Besides getting all of one of the world’s largest drug wholesalers, a combination would give Walgreens access to some services that would fit well into its retail pharmacy operations at a time when the pharmacy’s competitors are also diversifying. CVS recently offered to buy health insurer Aetna for $69 billion, for instance.

RELATED: 5 things to know about the CVS-Aetna deal

AmerisoruceBergen has a specialty drug service and its PharMEDium compounding pharmacy that sell expensive drugs directly to doctors and hospitals, although PharMEDium has recently had to close its largest lab for upgrades after running into FDA regulatory concerns, as well as a DOJ inquiry.

It also has its patient assistance program that can help consumers deal with reimbursement requirements for some expensive drugs, as well as help them get financial assistance to pay for them. That helps drugmakers sell more drugs. 

The deal also would further concentrate drug buying, adding more pricing pressure for drug companies at a time when pricing pressures have already made many generic drugs unprofitable to produce.

Another advantage for Walgreens is that it could be a fairly easy company to consolidate since its already owns a piece and the two have a close working relationship. Walgreens bought a minority stake in AmerisourceBergen in 2013 when the two struck a 10-year deal for the wholesaler to handle the acquisition of branded and generic drugs for the international pharmacy giant.