Dive Brief:
- Kroger has agreed to sell its specialty pharmacy unit to CarelonRx, a unit of Elevance Health, the grocery chain announced Monday. Terms of the deal were not disclosed.
- The transaction does not include Kroger’s in-store pharmacies or The Little Clinic, the company’s chain of healthcare facilities.
- Kroger is exiting the specialty pharmacy business as it prepares for a court fight with the Federal Trade Commission over its proposed merger with Albertsons.
Dive Insight:
Kroger did not provide specifics about why it decided to sell the specialized healthcare division, which comes as the company is focusing its attention on trying to complete its merger with Albertsons in the face of intense opposition from federal regulators.
“As part of our regular review of assets, it became clear that our strong specialty pharmacy business unit will better meet its full potential outside of our business,” said Colleen Lindholz, president of Kroger Health, in a statement. “We are confident this transaction will help the business to grow and deliver better results for patients.”
The sale, which requires regulatory approval and is due to close during the second half of the year, is not expected to affect the retailer’s results for the year, Kroger said in a press release. The grocer reported weak comparable-store sales in its most recent quarter even as its profits were up by more than half year over year.
Specialty pharmacies serve patients with chronic conditions that require complex care, such as rheumatoid arthritis, growth hormone deficiencies and bleeding disorders, the grocer noted. They provide a range of services, including side effect management, counseling and assistance with administrative issues. Midwest grocer Hy-Vee has owned Amber Specialty Pharmacy since 2014.
Kroger entered the specialty pharmacy business in November 2012, when it merged with Axium Pharmacy. At the time, Kroger described the transaction as a “strategic fit” and noted that it would be a way for it to enter a “high-growth” business that would complement its in-store pharmacies and other healthcare operations.
