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Pharmacy & Drug Stores

Pharmacy & Drug Stores

Going beyond physical inventory, we’ll factor in intangibles such as prescription lists, customer lists, brand names, trademarks, domain names, and licenses. We’ll also look at the level of branded vs. generic drugs, proximity to competitors (who would bid on the prescription list during an auction), and more.

The retail pharmacy and drugstore industry comprises familiar brands such as CVS, Walgreens, and Rite-Aid, as well as “closed-door” specialty pharmacies that service nursing homes and private care facilities. The sector also includes grocery stores and mass merchants with in-store pharmacies. Whether in-store or stand-alone, all retail pharmacy outlets stock prescription and non-prescription drugs , as well as toiletries, over-the-counter remedies, health & beauty supplies, paper products, household goods, food & beverages, and durable medical equipment (walkers, canes).

Insurance companies and pharmacy benefits managers continue to squeeze retailers’ profits by lowering reimbursement rates for prescription drugs, which often hurts margins. The same is true of high-dollar specialty drugs, which often achieve a lower margin. However, consumers continue to seek savings by shifting from branded drugs to generics, which offer higher margins for the retailer, but generate lower sales dollars.

Consolidation continues, with Walgreens trying to buy Rite Aid in 2015, only to be blocked by regulators. In 2017, the company instead opted to buy nearly 2,000 Rite Aid stores, while closing 600 overlapping locations. CVS also is in the process of trying to acquire Aetna, and Amazon continues to make moves in the healthcare space. To increase customer loyalty, many retailers continue to position themselves as wellness companies by offering in-store clinics and vaccinations.

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