Rite Aid’s relationships with health insurance
plans appear to be a priority to turning around the drugstore chain rather than
another attempt at a merger.
Though it’s early in the reign of Heyward
Donigan, the new Rite Aid chief executive officer is sending signals that
putting the drugstore chain and its pharmacists in a good spot with health
insurers is critical to the company’s survival.
It’s in sharp contrast to the dream of some
longtime Rite Aid shareholders who have held on to the stock hoping the
pharmacy chain will become a potential acquisition target of the online
retailer Amazon, which has talked about getting deeper into healthcare and the
prescription business.
But selling Rite Aid didn’t go so well under
Donigan’s predecessor, John Standley, who departed after two failed mergers and
a plummeting stock price that drew the ire of shareholders.
“Given my background, it's going to be obvious
that health plans are going to be a key focus for this company,” Donigan told
analysts on the company’s fiscal second
quarter earnings call last week.
Donigan touted her past executive roles at Premera Blue Cross, ValueOptions and Sapphire
Digital. And she said she will draw on that work with health insurers, medical
providers and pharmacies to build and grew Rite Aid, which has watched its
sales deteriorate.
“The partnership between us and health plans
in the regions that we serve is going to be crucial to our future,” Donigan
told analysts. “And I think we can really add a tremendous amount of value to
their future.”
While she’s been CEO for less than two months,
she wants to leverage Rite Aid’s thousands of pharmacists as a way to provide
more healthcare services.
“Pharmacists are the ultimate physician
extender, if you think about it,” Donigan said. “Our pharmacists touch probably
more members on a daily basis and engage more consumers on a daily basis than
any other provider in America.”
Rite Aid also plans on highlighting its
pharmacy benefit manager, EnvisionRx Options, when negotiating deals with
employers and health insurance companies.
Rite Aid’s PBM will remain a part of the
company at a time when larger PBMs are now owned by health insurance companies,
executives told analysts last week. Last year, Cigna bought the PBM Express
Scripts while Anthem this year is rolling out its own PBM, IngenioRx and the
nation’s largest health insurer, UnitedHealth Group, owns OptumRx.
“Our progress in attaining more lives in the
health plan business is because of our position as an independent pharmacy
services alternative offering of flexible models,” Ben Bulkley, who was named
CEO of Rite Aid’s EnvisionRxOptions
earlier this year. “Clients and prospects indeed share their
support for EnvisionRx as an essential option in the marketplace.”
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