Walgreens Invests $5.2 Billion in VillageMD
The Doctor is in…at Walgreens
Walgreens Boots Alliance (WBA) is pushing further into the healthcare market, announcing it is investing $5.2 billion in VillageMD, a primary care provider. Through the investment, Walgreens increased its stake in VillageMD from 30% to 63%.
Walgreens is working to move beyond filling prescriptions and selling drugstore items. It wants to become a destination for all consumers’ healthcare needs. By 2025, Walgreens and VillageMD aim to have around 600 primary care clinics in Walgreens stores. By 2027, the companies want to have 1,000 clinics.
Increasing Access to Healthcare
Walgreens is working to simplify healthcare for patients by having doctors and pharmacists work alongside each other. Three-quarters of Americans live within five miles of one of Walgreens’ 9,000 US stores. The VillageMD clinics will be around 3,000 square feet, taking up about one-quarter of the space in a typical Walgreens store.
Walgreens and VillageMD are trying to reach people in markets which are underserved. Over half of the new clinics will be in urban and rural areas where access to doctors is limited. The clinics will accept insurance but will also offer options for people who don’t have insurance.
Walgreens Joins CVS and Walmart
Walgreens is joining CVS Health (CVS) and Walmart (WMT) as it pushes further into the primary care industry. Many CVS stores have in-store MinuteClinics which provide urgent care and administer vaccines. CVS is also turning some of its stores into so-called HealthHubs, which offer medical care, testing, and other services in one place. Meanwhile, Walmart is increasing the number of primary care clinics in its stores. The retailer is currently focused on three markets at the moment.
With the shortages of doctors getting worse in some parts of the country, Walgreens wants to fill the void. So do rivals CVS and Walmart. It will be interesting to see how the drugstores’ incentives impact the US healthcare industry.
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