The fast-growing specialty pharmacy business may be the most attractive part of Walgreens Boots Alliance as rumors swirl the company will be taken over by private investors and broken into two or three companies.
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 specialized administration, refrigeration, packaging and patient instructions.
And specialized medications are also the nation’s top sellers and a key reason healthcare costs are rising. GLP-1 weight loss prescriptions Wegovy, Rybelsus, Saxenda, Ozempic and Zepbound – specialized medications that require injection — are the “single biggest driver” of employer health costs, adding 1% to the total premium expense for 2025, data released last fall from the benefits consultancy Aon said.
Specialty drugs account for well more than half of the total prescription spending any health plan, employer or government health program manages. Employer clients tell benefits consultants specialty costs easily account for 60% or more of their total drug spending, particularly as more Americans flock to GLP-1 medicines.
This has not been lost on executives atop Walgreens, who are investing more in specialty pharmacy even as they close hundreds of drugstores and cut costs across the company amid a turnaround effort.
Less than a year ago, Walgreens announced plans to launch Walgreens Specialty Pharmacy, a $24 billion business that integrates a new pharmacy equipped to handle gene and cell therapies with its existing pharmacy assets including its large specialty pharmacy and home delivery business, formerly known as AllianceRx.
Walgreens executives see their push into specialty pharmacy as a way to help put a lid on rising drug costs.
“Probably every payer in America continues to be very focused on managing specialty pharmacy to ensure that the right patient is getting the right drug that they’re staying on it because the downstream benefits you get from those particularly intense patients come not from cutting drug costs as much as from making sure that you’re getting what you’re paying for in terms of outcomes,” Walgreens chief executive officer Tim Wentworth told analysts and investors in January on the company’s first quarter earnings call. “And so we continue to see very strong interest in our specialty pharmacy in some carve-out bids as payers begin to want the transparency that we can bring to the table as an independent specialty pharmacy and also the tools that we bring to keep patients safe and healthy and help them manage the costs.”
Walgreens’ announcement that it was beefing up the specialty pharmacy business came just ahead of perhaps the world’s biggest event focused on specialty pharmacy. Next month, Asembia ASX25 is again expecting to draw thousands of pharmacy, specialty pharmacy and pharmaceutical industry executives and exhibitors from around the world to the Wynn & Encore Las Vegas.
Its attendance has more than doubled in less than a decade, organizers say, as more investment is made in specialty pharmacy from digital technologies to supply channels making sure these complex medications get to patients and that they also adhere to taking their prescriptions to improve health outcomes.
Increasingly, those in the retail pharmacy business including Amazon, CVS Health, Walmart and others are investing more in specialty pharmacy services as patient needs and pharmaceutical breakthroughs have changed. Last year, Walmart expanded its “autoimmune-focused” specialty pharmacy business to more than 30 locations across nine states.
Specialty also has more opportunities for growth than that of dispensing pills and capsules inside Walgreens retail pharmacies.
“It’s a really strong attribute of our longer-term growth is you certainly see in specialty costs going up as new indications, new products and so forth come to market,” Wentworth told analysts in January. “And obviously, the levers around that are very different than the levers on the small molecule pills and capsules sort of business.”
