Walgreens Boots Alliance will acquire Rite Aid for $9 a share, or a total of $9.4 billion, the companies announced yesterday. The merger represents a major consolidation in the drug store sector in the United States -- according to the Wall Street Journal, the combined marketshare of Walgreens and Rite Aid will be 46.5 percent compared to 30 percent from CVS, Walgreen's closest rival.
When it comes to mobile and digital health, it's clearly not a motivator in the sale: Walgreens has been quite a bit more active on the technology side than Rite Aid, but Rite Aid will bring some technical strengths to the table.
Walgreen's most notable digital health venture is probably its Balance Rewards program, which now boasts 82 million active members. What began as a typical retail consumer rewards program has grown into a BJ Fogg-inspired behavior change platform that promotes both healthy activity as well as tracking and recording health information. Walgreens has also partnered with Qualcomm Life, Misfit, and UnitedHealthcare to enhance Balance Rewards.
The company has many partnerships in the digital health space, including a telemedicine offering launched with MD Live, content partnerships with PatientsLikeMe and WebMD, and appointment booking via iTriage.
So what might Rite Aid bring to the table? In some areas, it merely matches Walgreens feature for feature. For instance, Rite Aid launched its mobile app for prescription refills in 2012, two years after Walgreens. It beat Walgreens to the punch with telemedicine integration, working with Optum to connect its customers with Optum nurses and other providers via Optum’s videochat-enabled NowClinic service, powered by American Well. But that service has now been discontinued.
But Rite Aid does have two digital health partnerships that Walgreens doesn't have. For one, health kiosk company higi signed an agreement last year to distribute more than 4,000 kiosks to Rite Aid stores. At the kiosks, users can take their vital signs, including blood pressure, height, and weight. Users can create an account which gamifies their vitals reading it, converting it to a single “HigiScore” that represents the user’s overall wellness (including vitals signs as well as “lifestyle” and “community” scores drawn from device integrations and social media), and “HigiWatts,” which are points users get for visiting kiosks regularly. Higi also has a mobile app available to facilitate further engagement with the platform. Notably, higi also works with Walgreens competitor CVS.
In addition, Rite Aid has a reciprocal distribution deal with GreatCall, a company that makes smartphones and flip phones for seniors. Rite Aid offers GreatCall phones at their stores and, in return, GreatCall preloads the Rite Aid app into its special user interface for older Americans.
Walgreens may or may not choose to expand these deals to all their 13,000 stores, but the company's history suggests it doesn't shy away from productive partnerships.
"We know as a brand and believe as a brand that innovation is critical, especially shared, joint innovation that really makes a difference in people’s lives," Walgreens President Alex Gourlay said at the HIMSS annual conference last year. "And importantly, we want to become a strategic partner of choice. It’s really important to Walgreens-Boots Alliance, it’s incredibly important to the healthcare market here in the US that we work together to create better solutions.”