Brief Excerpt from Industry Overview Chapter:
Companies in this industry sell prescription drugs, over-the-counter medications, health and beauty products, and general merchandise from physical retail locations. Major companies include Walgreen Co, CVS Health, and Rite Aid (all based in the US), along with Jean Coutu and Shoppers Drug Mart (Canada), China Nepstar (China), AS Watson (Hong Kong), Matsumoto Kiyoshi (Japan), Anton Schlecker and Dirk Rossmann (Germany), and Walgreen-owned Boots the Chemist (UK).
The evolving US health care system and growing competition from online and other competitors are rapidly transforming the retail pharmacy business. Chain stores account for about 50% of the US retail prescription market, according to IMS Health. Mail services account for about 25%, independent drug stores for 15%, and pharmacies at supermarkets for 10%. (Walmart ranks among the top five US retail pharmacies by prescription revenue.) CVS and Walgreen dominate the US chain drug store industry, especially in big cities. In a move that further consolidated the market, Walgreen in 2018 won a hard-fought battle with federal regulators to acquire about 1,900 stores from Rite Aid, giving Walgreen about 10,000 US locations.
PRODUCTS, OPERATIONS & TECHNOLOGY
Drug stores sell two main types of products: prescription drugs and "front-store" products, including over-the-counter (OTC) drugs, health and beauty aids, greeting cards, photo-finishing services, and general merchandise. Prescription drugs draw customers to the store, and stores focus their efforts on the number of new prescriptions they fill. The larger drug store chains typically generate...
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