Walgreens Boots Alliance CEO Stefano Pessina says Walgreens is a “true health-care company.”
Walgreens Chief Executive Officer, Stefano Pessina, is here to show that the company is more than just a retailer -- it is a true health-care company.
Its competitor, CVS Health, has been touting itself as a health-care company dedicated to transforming the patient experience and lowering costs in the process, according to CNBC. To help its case, CVS is acquiring insurer Aetna and hopes to close the deal sometime in the fourth quarter.
Once the deal is finalized, CVS will own a drugstore, a pharmacy benefit manager and an insurer. Walgreens will still be largely a pharmacy chain, though the company is trying to change that, according to CNBC. The company has inked partnerships with numerous health-care companies, including insurer Humana and diagnostics company LabCorp, to test new health services in some stores.
“So you will see that in a few years our stores will be completely different and will give lot of prominence, even in front of stores, to health and beauty…” Pessina said in an interview with David Faber at CNBC’s Net/Net Summit at the New York Stock Exchange.
According to CNBC, it’s not that being a retailer is a bad thing. But investors want drugstores reinvent their businesses as Amazon already steals sales of everyday items like toilet paper and will soon enter the prescription drug delivery business with its acquisition of online pharmacy, Pillpack.
News of the deal alone shaved $12.8 billion in market value from drugstores Walgreens, CVS and Rite Aid in one day, according to CNBC. Despite all the fear in the market, Pessina says it’s important to recognize that even Amazon understands it cannot be only online. He cited Amazon’s acquisition of Whole Foods affirming the e-commerce giant’s desire to get into brick-and- mortar retail.
Pessina’s comments come one day after CVS Chief Executive Officer Larry Merlo said while he doesn’t lie awake at night worrying about Amazon, he does want to ensure the company does not leave any “white space” for the company to disrupt. Both Merlo and Pessina are adding health services to their stores — albeit through different strategies, according to CNBC.