Walgreens and VillageMD
Walgreens Boots Alliance said Thursday it has agreed to become the majority shareholder of VillageMD as it opens hundreds of doctor’s offices with the primary care company.
As part of the deal, the drugstore chain will invest $5.2 billion in VillageMD. That will increase Walgreens’ ownership stake from 30% to 63%. VillageMD remains an independent company with its own management and board.
Walgreens said it expects the deal to close by the end of this year, pending regulatory approval.
The investment is part of Walgreens’ broader effort to turn its stores into health destinations that not only fill prescriptions, but also have doctors who can write them out and provide other types of care, such as annual checkups. The company is continuing 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 by 2027.
Walgreens CEO Roz Brewer said in an interview with The Washington City Times’s Bertha Coombs that the clinics will simplify patient care. She said Walgreens and VillageMD will have pharmacists and doctors working together. They have access to the same technical platform that brings together medical records. And they are conveniently located, a short walk away or by car.
“Your doctor’s recommendations are shared directly with the pharmacist,” Brewer said. “I think that’s a game changer when you consider what we can do.”
Most clinics will be about 3,300 square feet in size — nearly a quarter of the average drugstore 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 said it plans to use that footprint to reach people who have few, if any, doctors around. It said it plans to open more than half of its VillageMD clinics in urban neighborhoods and rural communities that are medically disadvantaged.
Walgreens and VillageMD have said the doctor’s offices accept different types of health insurance and offer a cash option, along with a sliding scale for people 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, which administers vaccines and provides walk-in emergency care appointments. CVS is also turning more stores into a HealthHub, which has a wider range of medical services, such as sleep apnea testing and diabetes treatment. 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 33 more on track to open by the end of the calendar year. The company first announced the partnership in 2019 and decided to expand its efforts after piloting five clinics in the Houston area.