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Walgreens CFO Downplays Amazon’s Role in Pharmacy Industry

Bloomberg logoBloomberg 11/19/2020 Angelica LaVito
a large brick tower with a clock on the side of a building: A Walgreens Boots Alliance Inc. logo is displayed outside a store in Pinole, California, U.S., on Wednesday, Nov. 6, 2019. Reports that Walgreens Boots Alliance Inc. is mulling what would be the biggest leveraged buyout in history were met with skepticism from Wall Street analysts who argued that the numbers simply didn't add up. © Bloomberg A Walgreens Boots Alliance Inc. logo is displayed outside a store in Pinole, California, U.S., on Wednesday, Nov. 6, 2019. Reports that Walgreens Boots Alliance Inc. is mulling what would be the biggest leveraged buyout in history were met with skepticism from Wall Street analysts who argued that the numbers simply didn't add up.

(Bloomberg) -- Walgreens Boots Alliance’s finance chief downplayed the impact of Amazon.com Inc. just days after the internet giant’s push into online pharmacy sent shares of pharmacies and drug distributors reeling.

While Amazon is a formidable competitor, at this point it’s only a mail pharmacy, Walgreens Chief Financial Officer James Kehoe said Thursday at the Wolfe Healthcare Conference.

Mail accounts for about 10% of prescriptions filled in the U.S., and people remain loyal to physical drugstores, Kehoe said. Walgreens boasts more than 9,000 stores where people can quickly pick up prescriptions or receive vaccines.

“When you want to get your Covid vaccination, are you going to call Amazon or are you going to call Walgreens or CVS?” Kehoe said. He questioned whether parents with a sick child would be satisfied to wait a few days to receive a prescription.

Co-Chief Operating Officer Alex Gourlay pointed to Walgreens’s recently overhauled mobile application and a feature that allows people to shop online and pick up their items in stores and drive-throughs or at a curbside in as little as 30 minutes.

Analysts and investors have long speculated about a potential move further into pharmacy by Amazon, and its Tuesday launch, accompanied with discounts for Prime members, prompted dives in shares of Walgreens, CVS Health Corp. AmerisourceBergen Corp. and McKesson Corp., among other stocks.

Kehoe called the market’s response to the news “disappointing.” Walgreens shares have slid 15% since Monday’s close and 37% this year amid pandemic disruptions in health care and retail sales.

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