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Rite Aid, GNC Team Up With drugstore.com

In a play to the booming online prescription market, pharmacy chain store Rite Aid Corp. and vitamin retailer General Nutrition Centers, Inc., (GNC), Tuesday partnered with drugstore.com to offer prescription delivery and various health and wellness products.

The three companies signed 10-year agreements which outline plans to offer customers online prescription drug order services, with mail delivery or same-day pick-up at Rite Aid stores. The deal will also expand drugstore.com's prescription service to customers with insurance reimbursement plans.

Under the terms of the agreement, Rite Aid will take a 25.3 percent stake in drugstore.com and GNC will own 8 percent of drugstore.com. for cash investments of $7.6 million and $2.4 million, respectively. Marketing and other commitments are also included in the drugstore.com deal.

The companies expect to score big among pharmacy rivals through an alliance of online and neighborhood pharmacies, and have high expectations for the appeal of pick-up and mail delivery services.

Terms of the agreement call for both Rite Aid and GNC to make drugstore.com its exclusive Internet pharmacy by adding a link to the Rite Aid Web site. Rite Aid and drugstore.com will also co-brand pharmacy marketing.

Rite Aid/GNC's Internet e-commerce and information site will be folded into drugstore.com. GNC and Rite Aid branding will be added to a redesigned drugstore.com by early fall.

"This alliance joins key players from the online pharmacy space, the retail drugstore setting and the wellness and nutrition category," said Peter Neupert, drugstore.com's president and chief executive officer.

"We are partnering with the player we believe will be a leader in this Internet space because of its well-honed marketing strategy and strong financial backing," said Martin Grass, Rite Aid's chairman and chief executive officer. "Combining drugstore.com's ease of ordering with the convenience of same-day pickup at our stores will attract both current and new Rite Aid customers."