SALT LAKE CITY, and WALNUT CREEK, Calif., Nov. 6 /PRNewswire/ -- American
Stores Company (NYSE: ASC) and Longs Drug Stores (NYSE: LDG) today announced
the merger of their pharmacy benefits management (PBM) subsidiaries.  The
joint venture agreement combines, the operations of RxAmerica, the PBM
subsidiary of American Stores, and Integrated Health Concepts, the PBM
subsidiary of Longs.  The new PBM joint venture has retained the name
RxAmerica.
    This merger of PBMs, owned by two of the nation's leading chain drug
retailers; American Drug Stores, Inc. and Longs Drug Stores, will enable them
to offer their combined services across a broader geographical base and
compete more effectively in the healthcare marketplace.  The combined entity
currently serves approximately 400 clients and manages over 3 million lives.
    With this merger, RxAmerica will re-focus on development and delivery of
patient care initiatives to improve wellness and reduce healthcare outcome
costs through a community retail pharmacy delivery system.  The new PBM will
be working on a number of healthcare initiatives with current managed care
partners as well as potential new clients.  These initiatives will enable the
PBM to offer employer services that control total healthcare costs as well as
traditional drug utilization cost reductions.
    The two retailers bring the strength of a total of 1,388 pharmacies (700
in California) which is the basis on which they have built their combined
network of 40,000 community pharmacies nationwide.  In addition, the new PBM
will own and operate a state-of-the-art mail service facility in Texas as well
as regional facilities in Southern California and Utah.
    It is the vision of the sponsoring retail company presidents, (both
pharmacists) Dave Maher (American Stores) and Steve Roath (Longs Drug Stores),
that managed care pharmacy can be better managed by those who actually provide
patient care.  They believe that a community pharmacy is well positioned to
capitalize on its accessibility, expertise and high level of patient
confidence.  It is this expertise at the point of contact, coupled with
provider developed information systems, that will form the basis for added
value services to be offered through the new PBM organization.
    The new PBM will differentiate itself from the others in the marketplace
(who offer pharmacy services as a commodity) by offering patient care services
focused on management of high cost/high risk patient populations with
conditions such as asthma, diabetes, hypertension, hypercholesterol and other
chronic disease states.
    These community pharmacy delivered healthcare services will be supported
by a broad pharmacy network, state-of-the-art eligibility management and
claims processing, formulary management, clinical pharmacy services,
compliance management and responsive client reporting capabilities.  As a
provider-based PBM, the new RxAmerica can also offer guarantees of further
benefits to its clients.  Pharmacy operational functions that provide
significant value to client/payors include: guaranteed customer wait times for
prescriptions, high formulary compliance and generic substitution rates.
    Dave Maher, president and chief operating officer of American Stores,
concluded that, "Our complementary strengths, common vision and shared
development costs should assure our mutual success and better serve the needs
of our Customers."
    Steve Roath, president of Longs Drug Stores stated, "It is exciting to see
that our vision of pharmacist delivered patient care services, which began
with the formation of Integrated Health Concepts (IHC), will be advanced and
complemented by the national pharmacy network and technical expertise of
RxAmerica."
    In connection with the change in focus of RxAmerica, its former co-
venturer, Geneva Pharmaceuticals, Inc., a subsidiary of Novartis Corporation,
has withdrawn from the joint venture.  The new provider-owned joint venture
arrangement calls for equal ownership by the two retailers and allows their
continued participation in other PBM networks.
    American Stores Company is one of the nation's leading food and drug
retailers.  It operates 1,689 stores in 26 states, including 169 jointly
operated combination stores each of which is counted as two stores.  Its
principal retail operations include Acme Markets, Jewel Food Stores, Lucky
Northern California Division, Lucky Southern California Division, Jewel Osco
Southwest, Osco Drug and Sav-on.
    Longs Drug Stores, with sales averaging over $8 million per store,
operates 345 stores in California, Hawaii, Nevada and Colorado.  Current news
on the Company can be obtained through a toll-free Service, 1-888-LDG-NEWS, or
via the Internet @ http://www.longs.com.

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