RIL’s pharma portfolio to expand with potential Boots Pharma chain deal

Reliance Industries Limited’s (RIL) presence in the pharma sector would markedly expand with the potential acquisition of drug retailer Walgreens Boots Alliance Inc.’s Boots pharmacies unit in the UK.    The Boots business is over 173-year-old spanning 2,200 stores in the UK that includes pharmacies, health and beauty stores. RIL and Apollo Global Management together have made a binding offer for Walgreens Boots Alliance’s Boots business that makes them the strongest bidder for the deal.   For the last two years, RIL has been expanding its presence in the pharma and health sector and trying to establish a firm base in the segment. In May 2021, the company operationalized 114 pharmacies. Earlier last year, RIL had acquired a 60% stake in online pharmacy Netmeds for Rs 620 crore. The company integrated Netmeds with Reliance Retail’s online grocery platform, JioMart.    RIL has been always leveraging technology in its business. Walgreens Boots Alliance earlier in 2020 had announced to advance the transformation of its global Information Technology (IT) operating model to accelerate digitalization.    “Technology merged with healthcare deeply. Technology has caused the healthcare industry to unbundle. Services that were typically the domain or the “business model” of one type of provider has unbundled entirely. Today it is possible to begin a diagnostic company or a drug distribution company by an entrepreneur without any previous experience using a digital-first approach,” said Salil Kallianpur, former executive vice president of GSK Pharma, and now a pharma industry analyst.     “Since these types of consumers facing platforms have emerged, conglomerates which have a legacy in such businesses such as Tata, Reliance Industries and now Adani have realised that they can expand into this easily,” he said.    Kallianpur explained that the application of technology allows the re-bundling of health services seamlessly. He said that it is no longer the domain of a hospital group to own ambulances, diagnostic labs, doctors and pharmacies. Today any company can offer these services through collaboration and innovation,” said Kallianpur.    Reliance Life Sciences another arm in the healthcare segment is part of the Promoter Group of RIL. Reliance Life Sciences is developing business opportunities in bio-therapeutics such as plasma proteins, biosimilars and novel proteins, pharmaceuticals (later-generation, oncology generics), clinical research services, regenerative medicine (stem cells therapies) and molecular medicine. RLS is one of the few centres in the world offering a specialized range of tests in molecular medicine and molecular genetics.    With Reliance Foundation-run H.N. Reliance Foundation Hospital in Mumbai, RIL has a physical presence in the healthcare market. “Healthcare and life sciences are amongst the top 10 industries with the highest EBIDTA. These profit pools attract industries that are looking for new avenues of growth and profit,” said Kallianpur.