par Robin Lasky
, Contributing Reporter | October 18, 2021
As part of its new strategic plan for long-term expansion, featuring the launch of "Walgreens Health", Walgreens Boots Alliance (WBA)is set to increase its equity in VillageMD for the purposes of making primary care services available within more retail locations.
The $5.2 billion investment announced on October 14 represents an increase in Walgreens’ ownership stake in VillageMD from 30% to 63%. Although the acquisition will give Walgreens a controlling interest, there are no plans to reorganize VillageMD’s management structure, which remains a distinct corporate entity and in anticipation of an IPO some time next year.
“Over the past two and a half years, we have worked side-by-side with Walgreens to create an integrated primary care and pharmacy model that accomplishes one primary goal: better patient care,” stated VillageMD CEO Tim Barry. "WBA’s investment supports our ongoing commitment to providing the highest quality healthcare to all patients, including many people who don’t currently have convenient access to a primary care provider."
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The partnership with VillageMD was first announced in 2019, and began with a trial run of five in-store primary care practices, a number that has since grown to 80. The companies anticipate that, with this additional investment, a minimum of 600 co-located primary care practices will open by 2025, and 1,000 by 2027, nationwide, with a special emphasis on expanding the accessibility of primary care services for underserved communities.
In September, Walgreens entered into a strategic partnership
with Northwell Health, New York’s largest healthcare provider, to develop and expand retail healthcare options.
The launch of "Walgreens Health" and plan for expansion into the lucrative market for value-based primary care services, comes at a time when Walgreens, along with major competitors, enjoyed a notable rise in profits last quarter in part due to their role in dispensing COVID-19 vaccinations, resulting in increased store traffic, according to industry news outlet Chain Store Age
Walmart and CVS have also made progress executing their own respective plans to increase retail healthcare offerings. Walmart plans to open more "Walmart Health" clinics that offer an assortment of primary care services. Meanwhile CVS has opened "Minute Clinics" that provide patients access to nurse practitioners.
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