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Walgreens buying Raleigh-based Kerr Drug

Posted September 10, 2013

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— Drug store giant Walgreen Co. (NYSE, NASDAQ: WAG) is expanding its base in North Carolina, buying Raleigh-based Kerr Drug's 76 stores and specialty pharmacy business.

Terms of the deal weren't disclosed.

"The Kerr Drug retail drugstores and specialty pharmacy business are an exceptional addition to the Walgreens family of companies," Walgreens President and Chief Executive Greg Wasson said in a statement. "We are closely aligned on the important task of expanding the health care role that community pharmacists can have with their patients, and we share the common goal of stepping out of the traditional drugstore format to create a new experience for our customers."

Walgreens, which had 2012 sales of $72 billion, has 8,117 drugstores in all 50 states, the District of Columbia and Puerto Rico, but it is a relatively new entrant to North Carolina's pharmacy competition, challenging more established chains Rite-Aid and CVS.

Last year, Kerr Drug’s retail drugstores and specialty pharmacy business recorded total sales of $381 million.

Walgreens also will acquire a Kerr Drug distribution center as part of the deal. Kerr Drug will retain ownership of its long-term care pharmacy business.

"Kerr Drug's strategy and core principles have always been focused on its unique ability to provide patients access to the most comprehensive and convenient health and wellness offering in the industry," Kerr Drug Chairman, President and CEO Anthony Civello said in a statement. "Walgreens is the perfect partner to continue this journey as a patient-oriented company dedicated to expanding the role of the pharmacist as an integral part of health care."

The acquired stores will continue to operate under the Kerr Drug brand for a while even after the deal is completed later this year, officials said. Walgreens hasn't yet decided how best to integrate the stores and the specialty pharmacy business into its operations.

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  • btneast Sep 11, 2013

    @Wake1, actually the bulk of money being made in drug sales go to pharmaceutical companies. The typical drugstore's gross margin in the pharmacy section is only about 22%.

    Pharmaceutical companies would kill for a 22% margin. Right now, they are fighting for survival. What most fail to realize that for every one drug that they hit a home run on, there are LOTS more that never make it out of trials. Research to get the next "wonder drug" is very expensive. The overwhelming majority of drugs under research never make it to market. It takes years to get a drug developed, tested and approved. My family has been working with one of the largest pharma companies for years.....gone are the glory days of lavish spending. The future of drug research is very bleak due to intense cost cutting measures.

  • henryjin Sep 11, 2013

    @Wake1, actually the bulk of money being made in drug sales go to pharmaceutical companies. The typical drugstore's gross margin in the pharmacy section is only about 22%. This number decreases as patients increasingly switch to government plans (medicare, medicaid), or if the drugstore orders from distributors like Cardinal Health.

  • btneast Sep 11, 2013

    This is what Americans want. Cheap. Cheap. Cheap. Scroll down to the SmartShopper section.

    Speak with your wallet, otherwise. Until Americans decide that shopping locally and spending $4.99 instead of $4.97 helps them and their neighbors more, this is what we get and deserve.

    You are right on the money. The reason Walmart, Home Depot, Target, etc do so well is because most of us flock to them to get that better deal.

  • Inside The Beltline Sep 10, 2013

    This is what Americans want. Cheap. Cheap. Cheap. Scroll down to the SmartShopper section.

    Speak with your wallet, otherwise. Until Americans decide that shopping locally and spending $4.99 instead of $4.97 helps them and their neighbors more, this is what we get and deserve.

  • lwe1967 Sep 10, 2013

    Too many large chains are buying up business. In the end, they will have all the power to charge what they want and keep what they want on the shelf. Where is the free enterprise?

  • SurvivorOne Sep 10, 2013

    There goes my cheap prescription. I look at ALL of the formularies for all of the stores and Kerr was the least expensive.
    Oh wait, we getting OBAMA Care. Wow! My days of worry are over.
    (a joke people, a joke)

  • Wake1 Sep 10, 2013

    Lot's of money being made in pharmacy sales!

  • Save It Sep 10, 2013

    Nothing like a little less competition.

  • CaryNCMom Sep 10, 2013

    Worked for Kerr Drug for 6 years, they just cannot compete with the buying power of Walgreens and CVS.

  • Southern Girl Sep 10, 2013

    Harris Teeter doesn't bother me. Prices are too high for my budget. I only get the e-Vic specials. I love Kroger.

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