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DEERFIELD, Ill. (Bloomberg)Walgreen Co., the largest U.S. drug- store chain, is looking to sell its pharmacy-benefits management business and has hired an adviser to run an auction, said three people with knowledge of the matter.
The sale of the PBM unit, which Walgreen started in 1995, may fetch $500 million to $1 billion depending on what assets are included in the deal, said the people, who declined to be identified because the talks are private. Walgreen, based in Deerfield, Illinois, is being advised by Bank of America Corp., the people said.
Walgreen received first-round bids for the business last week, said two of the people. Medco Health Solutions Inc., Express Scripts Inc. and CVS Caremark Corp., the three largest PBMs in the U.S., are among the companies that have expressed interest, the people said.
All of the PBMs declined to comment on the possible sale. A spokesman for Bank of America didn’t return a call seeking comment.
Medco Health, Express Scripts and CVS account for about 60% of the PBM market, according to Adam Fein, president of Pembroke Consulting Inc., a pharmacy-distribution consultant in Philadelphia. Walgreens Health Initiatives is the ninth-largest PBM in the country, with about 2.6% of the market, Mr. Fein said. It will process about 108 million prescriptions in 2010, he said.
Walgreen has more than 8,000 locations through retail stores, hospitals and corporate health centers. Walgreen has said its strategy is to provide health care services to patients rather than process claims. It’s expanding its retail and worksite medical clinics as well as its specialty pharmacy, home health care, infusion and respiratory therapy businesses.