Walgreens launches new business, invests in VillageMD
Walgreens Boots Alliance has launched a new business arm, Walgreens Health, enabled by investments in VillageMD, a primary care provider, and CareCentrix, a post-acute care company.
The move makes Walgreens the first national pharmacy chain to offer full-service primary care with primary care physicians and pharmacists co-located at its stores at scale, according to the company.
Walgreens Health is a new consumer-centric healthcare strategy from the pharmacy retailer. The announcement of Walgreens Health was made during the company’s virtual investor conference following quarterly earnings results.
The strategy increases Walgreens’ footprint in care provision, with the goal of transforming the role of the pharmacy and retail spaces with expanded health and wellness offerings.
“I am pleased to announce WBA’s new strategy to transform our core businesses, focus our portfolio and launch our next growth engine of consumer-centric healthcare solutions, enabled by a high-performance culture and winning team,” CEO Roz Brewer said in a statement. “Our strategy leverages an ecosystem including our trusted brands, exceptional assets, healthcare expertise and scale, integrated with a range of new talent, capabilities, resources and an intensified focus on operational excellence to drive long-term sustainable profit growth.”
Walgreens made investments in both VillageMD and CareCentrix to increase offerings in primary care and post-acute care. The retailer has already been building out its expanded healthcare offerings, including an earlier partnership with Clover Health and Blue Shield of California to launch new products and services to their members in the coming months.
The new investment in VillageMD brings Walgreens’ stake in the company to 63% from 30%. The investment will accelerate the opening of at least 600 Village Medical at Walgreens primary care practices in more than 30 U.S. markets by 2025 and 1,000 by 2027, with more than half located in underserved communities, according to Walgreens.
Currently, WBA and VillageMD have 52 co-located primary care practice locations, with plans to open another 80 by the end of 2021. VillageMD operates 230 practices across 15 markets with plans to continue expanding. The company’s revenue is expected to reach $1.3 billion in 2021, up from $217 million in 2017.
WBA also invested $330 million in CareCentrix, giving the company 55% ownership stake in the post-acute care business. The company is valued at $800 million.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."