On Thursday, Walgreens Boots Alliance Inc. (NASDAQ:WBA) is defending its recent agreement with drugmaker Valeant Pharmaceuticals International Inc. (NYSE:VRX), saying the arrangement will result in lower costs for customers and could even be used as a model for future deals.
In its earnings conference call Thursday, Walgreens executives faced questions from analysts over its 20-year distribution deal with Valeant, in which Walgreens will fill prescriptions for Valeant’s drugs treating the skin, eye and other areas. Analysts said some pharmacy-benefit managers had raised concerns about the arrangement.
“Of course, when you introduce something new to the market and some new thoughts there’s always people who may think differently,” Walgreens President Alex Gourlaysaid. “We’re trying to take costs out of the system.”
Walgreens Chief Executive Stefano Pessina hasn’t been shy about making bold moves. He took the helm of the biggest U.S. chain of drugstores after the full merger with European retail and drug distribution business Alliance Boots at the end of 2014. The Italian billionaire and serial deal maker announced a $9.4 billion acquisition of Rite-Aid Corp. last year that is still under regulatory review. And on Thursday he said he is open to more opportunities.
“We are open to any merger; we are open to a merger where we could have the control, a merger where we cede the control, a merger of equals,” Mr. Pessina said. “I’m really convinced that vertical integration is a necessity for this market.”