Why Sanford Health has acquired a pharmacy chain

Sanford Health is moving to make another acquisition to the growing health system in the upper Midwest.

The system, based in Sioux Falls, South Dakota, is moving to acquire Lewis Drug, a family-owned chain of 60 pharmacies in South Dakota, Iowa, and Minnesota. Officials say they hope to complete the transaction in the fall.

Bill Gassen, president and CEO of Sanford Health, says the deal reflects a natural evolution. Sanford Health has co-owned more than 40 Lewis Drug locations in rural communities outside Sioux Falls for years. Sanford also operates 11 clinics that are connected to Lewis Drug pharmacies.

The deal was announced last week.

“”At a time when the health care field is facing a variety of challenges, our partnership provides stability and helps safeguard access to essential health care services for the patients and communities we serve,” Gassen said in a statement.

“By bringing Lewis Drug into Sanford Health’s integrated health care system, we are helping ensure communities across the upper Midwest continue to have access to medications, vaccinations, screenings and expert support from Lewis Drug’s team of skilled pharmacists and pharmacy technicians,” he added.

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Sanford completed an even larger deal earlier this year, merger with the Marshfield Clinic Health System, based in Wisconsin. With the merger with Marshfield Clinic, Sanford has grown into a system with $11 billion in revenue.

Lewis Drug will maintain its brand identity, and its pharmacists and employees will become employees of Sanford Health. Sanford says the system doesn’t plan to make changes to the leadership team of Lewis Drug.

When the deal is completed, Mark Griffin, CEO of Lewis Drug, will remain in a “multi-year advisory role.”

“Customers and patients will continue to have the same great experience when they walk into a Lewis store as they have for the last 80 years – from our name and branding to our outstanding and dedicated customer service,” Griffin said in a statement.

Sanford operates 56 hospitals and more than 200 clinics across the rural Midwest, along with two health plans serving more than 425,000 people.

In an interview with Chief Healthcare Executive® in the spring, Gassen said he “could not be more excited” about the merger with Marshfield Clinic.

““The vision that we had together between Sanford Health and Marshfield Clinic Health System is really starting to come to fruition already,” Gassen said in the March interview. “The teams are working really hard right now on integrating the two organizations together, but even in the very early months, we've seen incredible advancements, and probably most importantly has been that cultural alignment.”

Sanford would consider merging with other hospitals and health systems under the right circumstances, Gassen said in the spring.

“I'm certain that Sanford Health will continue to grow with other strategic, like-minded partners,” he said. “And as we do that, we just want to make sure that we are very careful to make sure that we find partners like Marshfield Clinic Health System.”

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