Walgreens Boots Alliance will invest $1 billion in VillageMD to open ‘500 to 700’ physician-staffed ... [+]
Walgreens Boots Alliance will invest $1 billion in its primary care partner VillageMD to open 500 to 700 physician-staffed clinics inside its drugstores in more than 30 U.S. markets within the next five years.
Walgreens is the latest pharmacy chain to expand its primary care presence from pilot to scale nationwide as retailers further establish their stores as a destination for medical care traditionally found in a doctor’s office or outpatient clinic.
Financial terms disclosed Wednesday call for Walgreens to invest “$1 billion in equity and convertible debt in VillageMD over the next three years” that includes a $250 million equity investment completed earlier this week, the companies said. Walgreens will hold a 30% stake in VillageMD in three years following the investment, executives confirmed.
“Of (Walgreens) investment, 80% will be used by VillageMD to fund the opening of the clinics and build the partnership, including integration with Walgreens digital assets,” Walgreens said in a statement released Wednesday.
In the Walgreens effort with VillageMD, the clinics will build on the 2,500-square-foot facilities that opened last year next to five Walgreens stores in the Houston area and are called “Village Medical at Walgreens.” Most of the new Village Medical At Walgreens clinics will be 3,300 square feet but some will be as large as 9,000 square feet, the companies said.
“These clinics at our conveniently located stores are a significant step forward in creating the pharmacy of the future, meeting many essential health needs all under one roof as well as through other channels,” Walgreens Boots Alliance chief executive officer and executive vice chairman Stefano Pessina said.
Walgreens primary care expansion comes as rivals roll out their own primary care expansions. CVS Health is opening 1,500 HealthHub store formats with more healthcare items and medical services to complement its established MinuteClinics staffed by nurse practitioners while Walmart is opening more “Walmart Health” centers that feature an array of primary medical services, dental care, and behavioral health services as part of a new model.
VillageMD chairman and CEO Tim Barry said models of rivals are more focused on creating a new “access point” for care while the Village Medical at Walgreens models are with “physicians who have existing long tenured relationships with patients.” VillageMD, which employs or contracts with more than 2,500 physicians in nine markets, “will be hiring and recruiting” another 3,600 physicians to staff the clinics inside Walgreens, Barry said in an interview.
“This partnership allows us to unleash the power of primary care doctors and pharmacists, enabling them to work in a coordinated way to enhance the patient experience,” Barry said. “The results of our initial pilot clinics highlight that these outcomes are infinitely achievable.”
