Pharmacy giant Walgreens Boots Alliance has agreed to buy patient pharmacy data and inventory from 185 Fred’s stores across 10 Southeastern states for $165 million.
Pharmacy locations at these stores will be closed, which means patients used to visiting those will now have the chance to go to Walgreens, which has their information as part of the deal. Fred’s patients will receive letters notifying them of the transfer. Despite the asset sale, Memphis-based Fred’s will continue to operate roughly 160 pharmacies across its retail footprint.
“This agreement increases patient access to Walgreens pharmacies in the Southeastern U.S., and allows us to introduce more people to Walgreens trusted pharmacy services in these communities,” Walgreens President of Operations Richard Ashworth said in a statement. “We look forward to welcoming Fred’s patients and team members who are hired into available Walgreens positions.”
The companies expect the file transfers to begin in the fourth quarter of 2018, according to a press release.
Walgreens’ stock took a dive after Amazon entered the prescriptions drug business when it announced it was buying PillPack. But it has since recovered. The Deerfield, Illinois company ranks second only to CVS in terms of its pharmacy business
Fred’s has seen a rocky year after a failed attempt to shift the bulk of its business from discount retail into personal health care, culminating in the resignation of CEO Michael Bloom in April.
The retail chain, which operates about 600 locations, was meant to be a major beneficiary of Walgreen’s proposed acquisition of Rite Aid.
However, instead of gaining 865 locations as planned, Fred’s was left with only $25 million as compensation after the slated full acquisition failed to gain regulatory approval.
Since then, Fred’s has been slowly shedding its pharmacy business, part of a larger strategy to “monetize non-core assets,” including real estate holdings. Fred’s previously sold its specialty pharmacy arm EntrustRX to CVS Health in May for $40 million.
Walgreens, for its part, is buying up or investing in pharmacies here and overseas. In July, the company made a $416 million investment in a Chinese retail pharmacy chain Sinopharm Holding GuoDa Drugstores Co. That was in exchange for a 40 percent minority stake in the Chinese firm.
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