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The Wall Street Journal reports that Walgreens Boots Alliance has contacted drug distributor AmerisourceBergen about a possible takeover, a move that the story says “could help boost profitability at the drugstore giant and insulate it against external threats in an increasingly competitive health-care landscape.”

Walgreens already owns about 26 percent of AmerisourceBergen. A new deal would be for the balance of the company that it does not already own. Walgreens also is said to be AmerisourceBergen’s largest customer, representing about a third of its annual revenue.

AmerisourceBergen is described as a $153 billion company that supplies retail pharmacies and owns “a large specialty-drug business that distributes expensive medicines for cancer and other diseases directly to physicians and oncology clinics.” It also has a division that “operates patient-services hubs for pharmaceutical companies” and helps “patients navigate reimbursement hurdles with insurers and direct them toward how to get copay coupons or other financial assistance to offset their out-of-pocket costs.”

The Journal< describes the impetus behind a potential deal this way:

“For Walgreens, buying Amerisource would be an example of so-called vertical integration, in which a company acquires a link in its supply chain, enabling it to keep more of the margin in the products it sells—in this case drugs.

“If a deal is inked, it would come at a time when drugstore owners are looking for ways to insulate their businesses from external threats. In December, Walgreens rival CVS Health Corp. signed a $69 billion deal to buy health insurer Aetna Inc. Moves by e-commerce giant Inc. toward potentially entering the pharmacy business helped motivate CVS to strike a deal, people familiar with the matter have said.”
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