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00:00UP WITH A NEW NAME. TELL ME ABOUT THE CULTURAL CHALLENGE AND ALL THE CRITICISM OF TAKING A MORE FLAMBOYANT, BRITISH, AND EUROPEAN NAME, ALL THE SKILLS YOU HAVE HAD IN YOUR CAREER, AND BRING IT TO ONE OF THE MOST ICONIC CONSERVATIVE NAMES IN THE AMERICAN MEDIA. >> WHEN WE DID THIS MERGER, ONE OF THE REASONS WHY WE DID THE MERGER WAS BECAUSE WE THOUGHT, ON BOTH SIDES, THAT OUR FUNDAMENTAL VALUES WERE THE SAME. OUR CULTURE WAS NOT SO DIFFERENT. THERE WERE SOME SUBSTANTIAL DIFFERENCES, BUT NOT AT THE BOTTOM. WE PUT THE CUSTOMER, THE CLIENT, AT THE CENTER OF OUR BUSINESS. SO YES, THERE HAVE BEEN MANY, MANY CHANGES, BUT WE ALSO HAVE MANY, MANY MERGERS AND WE ARE USED TO PUT PEOPLE TOGETHER. ONE OF THE THINGS WE ARE ABLE TO DO IS TO GET PEOPLE OF THE WORLD TOGETHER, AND HELP TO CREATE A NEW IDENTITY, WHICH OF COURSE HAS TO BE THE MERGER OF THE TWO KINDS OF IDENTITIES. IF YOU TAKE ONE PART AND YOU WANT -- TOM: RIGHT. FRANCINE: THIS IS ONE OF THE MOST DIFFICULT THINGS TO GET RIGHT. YOU ALSO MENTIONED IN THE PAST THAT ONE OF THE AREAS YOU ARE INTERESTED IN IS VERTICAL INTEGRATION. WHAT DOES THAT MEAN, AND HOW IT YOU APPLY IT TO YOUR COMPANY? >> I WOULD SAY THAT VERTICAL INTEGRATION IS SOMETHING THAT MAKES A LOT OF SENSE OF THE U.S. THE U.S. IS A COMPLICATED STRUCTURE FOR DRUGS IN PATIENTS. THE HEALTH PLAN, THE DISTRIBUTION,THE U.S. IS A COMPLICATED AND THERE ARE A LOT OF, LET'S SAY, THIS SYNERGIES. -- DISYNERGIES. IF WE COULD COMPACT THE CHAIN AND MAKE IT, LET'S SAY, MORE INTEGRATED, WE WOULD SAVE A LOT OF MONEY. TOM: I COULD ASK IF YOU ARE INVOLVING THE BOOTS ALLIANCE TO DOUBLE IT, BECAUSE EVERYONE ELSE IS MOVING TO DOLE IT. BUT YOU ARE FOLDED INTO THIS VALEANT DEBATE, THIS IDEA OF THE NEW PHARMACY, NEW DRUG DISTRIBUTION. WHERE WILL VALEANT AND YOUR INDUSTRY BE IN FIVE YEARS? >> WELL, IN FIVE YEARS, I BELIEVE WE WILL HAVE MUCH MORE INTEGRATION, AND A DIFFERENT PARTNER OF THE INDUSTRY. THE MONEY FACTOR, WE CONTINUE TO BE ABSOLUTELY DIFFERENT. OF COURSE THE DEDUCTIBLE MUST BE INDEPENDENT BECAUSE THEY HAVE TO BE FREE TO PRESCRIBE WHAT THEY BELIEVE IS THE RIGHT THING FOR THE PATIENT. I BELIEVE THAT THE COST OF ALL THESE ORGANIZATIONS IN THE U.S., AND EVEN OUT OF TOWN, IS EXPLODING. WE WILL HAVE TO -- TOM: WILL IT MEAN HIGHER PRICES FOR THE CUSTOMER? >> IT SHOULD BE THE COUNTRY, IT SHOULD BE LOWER PRICES FOR THE PAYER AT THE END OF THE DAY. TOM: THANK YOU SO MUCH, GREATLY APPRECIATED. WBA? >> WBA. TOM: WALGREEN BOOTS ALLIANCE. COMING UP, WE BEGIN OUR DISCUSSION ON ECONOMICS. JOINING US, ADAM POSNER. WE LOOK AT THE ECONOMICS AND INTERNATIONAL RELATIONS OF DAVOS . STAY WITH US. ♪

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Walgreens CEO: Consumer Drug Prices Should Be Lower

Stefano Pessina, chief executive officer at Walgreen Boots Alliance, discusses the mix of cultures behind Walgreens and the need for lower drug prices for consumers. He speaks from the World Economic Forum in Davos, Switzerland on "Bloomberg Surveillance." (Source: Bloomberg)

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