Health Beat: Walgreens parent to sell 865 Rite Aid stores to Fred’s Pharmacy for $950 million

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WALGREENS PARENT TO SELL 865 RITE AID STORES TO FRED’S PHARMACY FOR $950 MILLION
Walgreens Boots Alliance Inc. (and Rite Aid Corp.) on Tuesday (Dec. 20) announced they have entered into an agreement to sell 865 Rite Aid stores and certain assets related to store operations to Fred’s, Inc. for $950 million in an all-cash transaction. The transaction is subject to Federal Trade Commission (FTC) approval, the approval and completion of the pending acquisition of Rite Aid by Walgreens Boots Alliance, and other customary closing conditions.

The agreement is being entered into to respond to concerns identified by the FTC in its review of the proposed acquisition of Rite Aid by Walgreens Boots Alliance, which was announced in October 2015. Walgreens Boots Alliance, the parent company of U.S.-based Walgreens and United Kingdom-based Boots pharmacy chains, is actively engaged in discussions with the FTC regarding the transaction and is working toward a close of the Rite Aid acquisition in early calendar 2017.

The proposed divestiture transaction, if approved, would establish Fred’s Pharmacy as one of the largest drugstore chains in the U.S. with a significant presence in areas such as the South and on the East and West Coasts. Specific locations of the stores to be divested will be announced upon FTC approval of the Walgreens Boots Alliance and Rite Aid merger.

VA STUDY CONFIRMS HIGH CURE RATES WITH NEW HEPATITIS C DRUGS
A Department of Veterans Affairs (VA) database study shows that new drug regimens for hepatitis C have resulted in “remarkably high” cure rates among patients in VA’s national health care system. Of the more than 17,000 veterans in the study, all chronically infected with the hepatitis C virus at baseline, 75% to 93% had no detectable levels of the disease in their blood for 12 or more weeks after the end of treatment. The therapy regimens lasted 8 to 24 weeks, depending on patient characteristics.

“This promising news comes as the VA is dedicating significant funds to help greater numbers of patients with hepatitis C,” said David Shulkin VA Under Secretary for Health.

As of mid-September 2016 alone, the department treated more than 100,000 veterans infected with the virus. More than 68,000 of these patients had been treated with these new highly effective antivirals. The overall results were consistent with those from earlier clinical trials that led to FDA approval of the three new drug regimens in the study.

CMS FINALIZES ‘RISK POOL’ RULES FOR THE HEALTH INSURANCE MARKETPLACE
The Centers for Medicare & Medicaid Services (CMS) on Friday (Dc. 16) issued the Notice of Benefit and Payment Parameters final rule and the final Annual Letter to Issuers for 2018, which it said will further strengthen the Health Insurance Marketplace that millions of Americans rely on for health coverage. The primary focus of the notice – risk stabilization – complements recent announcements that improve the risk pool, including actions to address third party payments of premiums and improve program integrity for special enrollment periods.

Under the new rules, CMS is creating a next generation risk adjustment model that addresses four specific phenomena, it said. The new risk adjustment model will: (1) account for the number of individuals who had a Marketplace plan for less than 12 months; (2) better account for the risk of high-cost patients; (3) improve compensation for healthier members; and (4) use prescription drug data as another way to account for sicker members.

In addition to these modifications to risk adjustment, the final rule and issuer letter contain other provisions to improve the Marketplace consumer experience and strengthen the individual and small group markets as a whole. A fact sheet on the major provisions of the final rule can be found on the CMS website.