There are BIG changes on the way in the coming 2016 year where pharmacies could start to see huge opportunities for growth and even major acquisitions. HUGE for pharmacies in 2016 and probably why we see Rite Aid getting picked up at a $4B premium:
On February 6, 2015, the Centers for Medicare & Medicaid Services (CMS) issued a final rule, making changes to the Medicare Advantage and prescription drug benefit programs (Parts C and D) for Contract Year 2016. Many of the provisions of the proposed rule published on January 10, 2014 that were supported by pharmacy did not make it into the final rule. The final provisions include: revisions to dispensing for long-term care facilities – making it clear that dispensing fees should not be prorated, expansion of quality improvement program regulations, and changes to audit and inspection authority, among others.
Those not being finalized include any willing pharmacy provisions, reducing the number of Part D plans a sponsor may offer, and codifying CMS interpretation of the Part D non-interferene provision. Companies like Rite Aid Corporation (NYSE:RAD), Walgreens Boots Alliance Inc (NASDAQ:WBA), CVS Health Corp (NYSE:CVS) and undervalued companies like Progressive Care Inc (OTCMKTS:RXMD) have all been put in position to benefit from these regulatory changes in the year ahead.
Rite Aid Corporation (NYSE:RAD), is one of America’s leading drugstore chains with close to 5,000 stores in 31 states and the District of Columbia. The company boasts fiscal 2015 annual revenues of $26.5 billion. Stemming from the most recent press Rite Aid Corporation is in the process of closing a deal to be purchased by the largest U.S. drugstore chain Walgreens Boots Alliance Inc (NASDAQ:WBA), for more than $10 billion. This business venture would follow CVS Health Corp (NYSE:CVS)‘s $10.1 billion purchase of Omnicare Inc this past August. Walgreens and Rite Aid could be making an announcement on the agreement as soon as Wednesday, according to a source who requested anonymity because the terms of the deal are confidential.
Walgreens Boots Alliance, Inc. is the first global pharmacy-led, health and wellbeing enterprise. The company was created through the combination of Walgreens and Alliance Boots in December 2014, bringing together two leading companies with iconic brands, complementary geographic footprints, shared values and a heritage of trusted healthcare services through pharmaceutical wholesaling and community pharmacy care, dating back more than 100 years.
Walgreens Boots Alliance, Inc. has created the discussion whether or not to buy their smaller competitor Rite Aid. Combining companies would create a drugstore retailing monster, operating throughout 12,000 locations in the U.S. and filling over 1 billion prescription drugs each year. A merged Walgreens and Rite Aid would have an especially dominating presence in California and New York, operating more than 1,000 stores. Walgreens would also be able to add weight in Rite Aid’s second-largest market in Pennsylvania, where it runs over 500 sites compared to Walgreens’ 130 stores.
Progressive Care Inc (OTCMKTS:RXMD), through its subsidiary PharmCo, LLC, is a South Florida provider of prescription pharmaceuticals working in health practice risk management, the sale of anti-retroviral medications and related medication therapy treatment, the sale and rental of reliable medical equipment and the demand of prescription medications to long-term care facilities.
The company stated that the pharmacy filled over 17,000 prescriptions in the most recent press release, which is close to 30% increase over the same month this past year and close to 4% higher than the previous month. Moving along the third quarter of this year, PharmCo filled over 50,000 prescriptions documenting the best sales quarter for the company to date. Over recent weeks, the company has moved up by as much as 79% after nearing highs of 0.01 during mid-October trading and closing out Monday’s session at $0.007.