Walgreens and VillageMD
Walgreens Boots Alliance announced Thursday that it had agreed to become the majority owner of VillageMD as it opens hundreds of medical practices with the primary care company.
As part of the deal, the drugstore chain will invest $ 5.2 billion in VillageMD. This increases Walgreens’ stake from 30% to 63%. VillageMD remains an independent company with its own management and board.
Walgreens expects the deal to close by the end of this year, subject to regulatory approval.
The investment is part of Walgreens’ wider effort to transform its businesses into health goals that not only fill out prescriptions but also have doctors to write them and offer other types of treatments, such as annual checkups. The company is accelerating its plans to open Village Medical clinics in existing Walgreens drug stores. The goal is to have at least 600 primary care clinics in more than 30 U.S. markets by 2025 and 1,000 primary care clinics by 2027.
Roz Brewer, CEO of Walgreens, said in an interview with CNBC’s Bertha Coombs that the clinics will make patient care easier. She said Walgreens and VillageMD will have pharmacists and doctors working together. You have access to the same technology platform that brings medical records together. And they’re in a convenient location, just a short walk or drive away.
“Your doctor’s recommendations will be passed directly to the pharmacist,” Brewer said. “I think that’s a game changer when you think about what we can do.”
Most clinics will be around 3,300 square feet – nearly a quarter of the drugstore’s average size of 13,500 square feet.
Walgreens has about 9,000 stores in the US and more than 75% of Americans live within five miles of one of them. Brewer plans to use this footprint to reach people who have few, if any, doctors around. The company plans to open more than half of its VillageMD clinics in medically underserved neighborhoods and rural communities.
Walgreens and VillageMD have said the doctor’s offices accept different types of health insurance and offer an out-of-pocket option as well as a sliding scale for those who don’t have insurance.
With the move, Walgreens is following in the footsteps of competitors including CVS Health and Walmart. Many CVS stores already have a MinuteClinic that delivers vaccines and offers walk-in, urgent care appointments. CVS is also transforming more of its stores into a HealthHub, offering a wider range of medical services such as sleep apnea testing and diabetes management. Walmart is opening a growing number of primary clinics with a low-cost model, but so far they have been concentrated in Georgia, Florida, and the Chicago area.
Walgreens and VillageMD have already opened 52 primary care clinic locations and have another 33 on their way to launch by the end of the calendar year. The company first announced the partnership in 2019 and decided to expand efforts after a pilot project of five clinics in the Houston area.