Detroit Medical Center sells outpatient pharmacy business to Walgreens

Jay Greene
The Detroit Medical Center has sold off its outpatient pharmacy business to drugstore giant Walgreens.

The Detroit Medical Center has sold its retail and outpatient pharmacies to Walgreens Co. as part of a pharmacy reorganization.

The deal encompasses seven specialty pharmacy sites and one mail-order service business, Crain's has learned. Terms were not announced.

Over the past two years, DMC has been reorganizing its outpatient pharmacy operations, laying off and reassigning at least two dozen employees.

"I am pleased to share with you some important news that will enhance the services and convenience we provide to our patients and allow us to focus more resources on DMC's core mission of care delivery," DMC CEO Tony Tedeschi, M.D., said in a Wednesday email to employees.

"DMC has entered into an agreement with Walgreens, the world-class pharmacy operator, to transition DMC's retail, outpatient pharmacies into Walgreens-branded locations," said Tedeschi in his weekly email to employees. "This transition, which we expect to have in place and fully operational by August, is yet another example of DMC's transformation as we strengthen our focus on patient care and align our resources to support our care objectives."

In a statement, Walgreens confirmed it has purchased seven specialty pharmacies and one mail-service specialty pharmacy from DMC and its parent, Dallas-based Tenet Healthcare Corp.

Scott Goldberg, Walgreen's senior manager for media relations, said the transaction is scheduled to close sometime this summer. "We look forward to continuing to work with DMC's medical team as we focus on improved health outcomes through personalized support, patient engagement and expert care," he said.

Goldberg said Walgreens has approximately 300 community-based specialty pharmacy locations in the U.S., with about two-thirds located inside a hospital or medical office building. Walgreens is a unit of Deerfield, Ill.-based Walgreens Boots Alliance Inc.

DMC officials have told previously told Crain's that outpatient pharmacy lost money and was not a core business for DMC.

"As you are aware, faced with broader industry challenges, hospitals nationwide must discover new, creative ways to improve patient care," Tedeschi said in the email. "Walgreens has successfully partnered with dozens of medical care providers to operate outpatient, retail pharmacies within hospital facilities. Walgreens is well known for its pharmacy expertise, high customer service standards and respected global reputation, and I am very confident that this transition will be successful and better serve our patients."

Walgreens will operate branded specialty pharmacy outlets at several of DMC's six hospitals. It also will coordinate with DMC's discharge planners to have prescriptions filled by DMC's in-house Walgreens.

DMC began this year with a goal of reducing its 11,000-employee headcount by 3 percent, or about 330. Officials have said those layoffs are nearly over, but three sources familiar with the matter who requested anonymity have told Crain's that owner Tenet Healthcare Corp. is seeking further cost savings.

The pharmacy reorganization began in the fall of 2016 when DMC laid off David Bach, DMC's vice president of pharmacy for more than 20 years. The associate professor of clinical pharmacy at Wayne State University School of Medicine had been with DMC for more than 20 years.

Crain's reported in March that DMC closed its coumadin clinic at Harper University Hospital for heart, stroke and other patients requiring treatment to prevent blood clots and is referring patients to primary care doctors in the community. Coumadin is a medication that helps prevent blood clots that can lead to heart attacks and stroke.

One of the reasons DMC closed the clinic was that it had run for decades under the outpatient pharmacy department, which it was in the process of reorganizing.

In March, Crain's reported that a dozen pharmacists and pharmacy technicians were laid off or resigned.

All current DMC pharmacy employees are expected have an opportunity to interview for positions at Walgreens, either at a DMC retail pharmacy location or another Walgreens outlet.

Few hospitals still operate outpatient pharmacy departments, although pharmacy experts said it is common for urban teaching hospitals like DMC to maintain an outpatient pharmacy staff. Compliance with medications is easier when patients can fill their prescriptions when they leave the hospital, rather than going to an outside pharmacy.

"DMC sells outpatient pharmacy business to Walgreens" originally appeared in Crain's Detroit Business.

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