Walgreens Steps Up Restructuring, Will Sell Home Infusion Business
Walgreens Boots Alliance (WBA) announced its first major divestiture under new leadership, signing a deal to sell a majority stake in its infusion business to private equity firm Madison Dearborn Partners.
The fate of the infusion business has been a topic of speculation in recent months as Walgreens looks to cut $1 billion in costs as part of its acquisition of European drugstore chain Alliance Boots. The home infusion business has about 4,700 employees, 89 infusion pharmacies and 110 alternate treatment sites in 40 states and is a leader in the market.
Why would the “leader in the market” sell off a majority stake in a business… Isn’t that what Walgreens did when it purchased a share in Boots .. which ended up the “hunted” became the “hunter” and since the final merge.. a good deal of those in the e-suite.. are no longer there.
So how does a company look to cut costs/expenses… could it be that this division of Walgreens was losing money.. otherwise.. does it make sense to sell off a profitable division to cut costs.
Filed under: General Problems
http://www.drugstorenews.com/article/pharmacies-drawn-home-infusion
One sticking point has been the lack of an established reimbursement system for the equipment, supplies and services needed by homebound patients and home care providers to inject the medicines that require infusion. Although Medicare generally covers the specialty drugs themselves, Congress has yet to approve legislation that would fund equipment purchases for home infusion.
What’s more, for both public and private payers, home infusion services too often fall into a reimbursement limbo between coverage for home health care and coverage for prescription drugs. “Benefit coverage for home infusion specialty drugs is fragmented across the pharmacy and medical benefits,” noted pharmacy industry expert Adam Fein, president of Pembroke Consulting and CEO of the Drug Channels Institute.
For pharmacies that deal in specialty medicines, staking a claim to the non-hospital infusion services business also is an urgent matter of market positioning and industry access. Infused drugs now account for roughly $35 billion of the specialty Rx market, according to CVS Caremark’s Insights 2013 Specialty Drug Trend report. And, as Fein points out, “Infused drugs also account for one-third of specialty drugs in the pipeline.”