Walgreens To Buy The Rest Of Shields Specialty Pharmacy For $1.37 Billion

Walgreens Boots Alliance is buying the rest of the specialty pharmacy company Shields Health Solutions for $1.37 billion.

The nation’s largest drugstore chain said it has “entered into a definitive agreement to acquire the remaining 30% stake” of Shields from equity holders in the specialty pharmacy company that include private equity firm Welsh, Carson, Anderson & Stowe and the company’s founder and board chairman Jack Shields. The deal is expected to close by the end of the 2022 calendar year.

Specialty pharmacies are an increasingly important player in the U.S. health system given the flood of expensive drugs on the market derived from biotechnology. Such medicines are more complicated than pills and capsules picked up at the corner drugstore and often require specialty administration, refrigeration, package and patient instructions.

“Our full acquisition of Shields will complete another major milestone as part of our consumer-centric healthcare strategy to drive sustainable long-term growth, and we are very pleased with our partnership and integration with Shields,” Walgreens chief executive Roz Brewer said Tuesday. “We can now make further progress on our strategy through Shields’ integrated model, increasing our value to health systems, expanding access to payor partners and supporting improved outcomes and lower costs.”

Shields has nearly 80 health system partners representing approximately 1,000 hospitals nationwide that serve more than 1 million patients, the companies said. Walgreens made its initial investment in Shields in 2019.

“Shields will continue as a distinct business and brand within Walgreens,” Walgreens said in a statement. “John Lucey, co-founder and current president of Shields, will lead the organization as CEO of Shields, and current Shields CEO Lee Cooper will take on a new executive role within WBA. Lucey partnered with Jack Shields 10 years ago to start the business and has led its operations for most of that time.”

In the same press release announcing the Shields deal, Walgreens said John Standley is leaving the company to “pursue other opportunities.” Standley, a former Rite Aid CEO, has been leading all of Walgreens U.S. drugstore operations for the last two years.

Walgreens said the segment will “now be organized under two leaders: pharmacy led by Cooper, and retail led by Tracey Brown, president, Walgreens Retail Products and chief customer officer.”

“Both will report directly to Brewer and serve on the Executive Leadership Team,” Walgreens said. “Cooper has been appointed to the role of executive vice president, Walgreens Pharmacy, beginning Oct. 1, and Standley will remain at the company until Nov. 1 to ensure a smooth transition.”