Walgreens Upping Retail Healthcare Ante With Additional $5.2B Investment In VillageMD
Walgreens Boots Alliance is planning to invest $5.2B to accelerate the opening of about 600 Village Medical at Walgreens primary care practices by 2025 and about 1,000 by 2027.
Walgreens and VillageMD, which operates the Village Medical clinics, presently have 52 primary care practice locations open adjacent to Walgreens stores and will have more than 80 open by the end of 2021. The companies first partnered in 2019 with five locations in the Houston market and expanded the partnership in 2020, planning as many as 700 locations at that time.
The latest investment will also give the retail pharmacy giant a controlling interest in VillageMD. Previously, Walgreens had a 30% ownership stake in VillageMD. With the investment, its stake will rise to 63%.
VillageMD will remain a stand-alone company separate from Walgreens, with its own board and management. The company is planning to conduct an initial public offering in 2022.
The expansion represents another parry in the struggle between Walgreens and its main rival, CVS Health, to provide clinical healthcare services at their respective retail locations. Early this month, CVS CEO Karen Lynch outlined plans to reinvent hundreds of CVS stores into healthcare outlets devoted to primary care. The move will come on top of the company's efforts to roll out HealthHUB wellness and healthcare centers nationwide.
Not all forays into retail healthcare have gone as planned. Haven, a joint venture by Amazon, Berkshire Hathaway and JPMorgan Chase, which kicked off in 2018 and was supposed to disrupt the U.S. healthcare system, closed earlier this year.