When Gregory Wasson hits the ballroom stage at Chicago’s Navy Pier next January for Walgreen’s annual meeting, he’ll ﬁnally have an answer for all the griping, greying shareholders who worried out loud for years about whether a company that opened a new store every 17 hours, adorned with the familiar iconic red mortar and pestle or red ﬂying ‘Ws’, would one day run out of street corners for expansion.
Thanks to an alliance with the Italian billionaire Stefano Pessina and his Alliance Boots chain, which has a similarly popular pharmacy brand throughout Europe, there’s little chance of that now. Wasson is en route to forging the ﬁrst global pharmacy chain, with worldwide buying power and a massive distribu- tion network. “This is certainly our ﬁrst step into Europe and beyond,” says Wasson, a pharmacist who of- ﬁcially got his start as an intern in the corporate office during his Purdue University pharmacy school days 32 years ago and command of the drug- store chain in 2009. “This gives us an international platform. This allows us to accelerate where we have been going the last two or three years.”
And though Wasson won’t say it, the hookup is also something else: A hedge against ObamaCare. While other US pharmacies struggle with tightening payments from Wash- ington, cash-strapped states and penny-pinching insurance compa- nies, Wasson, 53, and Pessina, 71, hope to sidestep an era of growing government controls to capitalise on emerging markets with fattening pocketbooks, countries looking to access safe and eﬀective medicines.
“The US government’s becoming the larger payer of prescription drugs could be a larger long-term challenge for pharmacy reimbursement,” Mark Miller, an analyst at William Blair, wrote recently. “So, while Walgreen has framed the opportunity for global expansion as an incremental opportunity, it also does diversify the business away from the potential long-term risk.”
(This article is excerpted from the latest Forbes India 26 October, 2012 issue which is now available at news stands and book stores. You can buy our tablet version from Magzter.com)