Walgreens, Rite Aid plans add to pharmacy career stress
Friday, July 07, 2017
The pharmacy school curriculum doesn't typically include a course devoted to stress management, but maybe it should.
The plan for Walgreens to acquire Rite Aid, first announced in late 2015, has been abandoned. The news pushed RAD stock prices further downward, but this has been the general trend over the past year anyway.
The roughly 9,000 pharmacists involved — not to mention technicians and other store staff — are likely curious about what all this will mean. This is especially true since an alternative deal has emerged that would involve Rite Aid selling Walgreens about 2,100 stores for a price of $5.1 billion.
I don't have a crystal ball. I can't tell you what the outcome of the proposed replacement deal will be, but I suspect it will be approved by the FTC.
However, I can tell you this process is probably stressful for employees of Rite Aid, Walgreens and even Fred's (which lost the opportunity to acquire about 1,000 Rite Aid stores that were part of the original deal). And additional sources of stress are not exactly conducive to a great quality of life in a profession that is already stressful enough.
A study published in the Journal of Management and Strategy a few years back documented the findings of previous research on the impact of mergers on employees. Though not specifically related to pharmacy, the findings are likely relevant to our profession as well.
The authors noted how the news about mergers could result in "rumors and speculations regarding various merger scenarios, which could make employees become uncertain and anxious about their futures." Furthermore, they pointed to studies confirming that after a merger (or acquisition) employees are often left "feeling stronger senses of loss, grief and even anger about losing their old identities and values."
I have no interest in adding to the stress by speculating about what may or may not happen now. I do, however, think pharmacists should always be thinking about the next step in their careers and this might be especially important at such a time as this.
So, assuming that the deal to sell 2,100 Rite Aid stores to Walgreens is approved, what will that mean?
Many pharmacists working in eastern states for Rite Aid may need to think about Walgreens acquiring their store. I live in Massachusetts where Rite Aid currently operates 146 locations. If the new deal is approved, Walgreens will acquire 136 of them, leaving just 10 Rite Aid pharmacies in the state. In Maine, where Rite Aid currently has 76 stores, there would be only one left after the purchase. New York would drop from 599 to just 146 stores.
You can see all this data, provided by Rite Aid, in Adam Fein's nicely written article entitled "Observations on the New Walgreens Boots Alliance-Rite Aid Deal."
The career-related question in this scenario is which Rite Aid stores Walgreens will end up merging with nearby locations in order to save money — especially if the Rite Aid store volume is too low to justify maintaining it.
According to data from Becker's Hospital Review, it appears that both Rite Aid and Walgreens employ, on average, about two pharmacists per store (2.0 for Rite Aid and 2.2 for Walgreens). So, if the purchase of 2,100 stores results (just speculating here) in a reduction of say 200 Rite Aid stores (locations no longer needed), that would be about 400 pharmacist jobs lost in the process.
Again, I don't own a crystal ball. I do know that as pharmacists we have a responsibility to our patients to continue, amidst the stress, to deliver great levels of care in a safe, suitable atmosphere. The responsibility for creating smooth transitions will fall upon the leadership of both organizations, and I hope they take that responsibility humbly and seriously, as the quality of life for both patients and employees will be at stake.
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