Walgreens boosts stake in primary care company VillageMD with a $5.2 billion investment

2 days ago

Walgreens and VillageMD

Source: Walgreens

Walgreens Boots Alliance said Thursday that it has agreed to go the bulk proprietor of VillageMD, arsenic it opens hundreds of doc offices with the superior attraction company.

As portion of the deal, the drugstore concatenation volition put $5.2 cardinal successful VillageMD. That volition summation Walgreens' ownership involvement from 30% to 63%. VillageMD volition stay an autarkic institution with its ain absorption and board.

Walgreens said it expects the woody to adjacent by the extremity of this year, pending regulatory approval.

The concern is portion of Walgreens' broader effort to crook its stores into health-care destinations that not lone capable prescriptions, but besides person doctors who tin constitute them and supply different types of care, specified arsenic yearly checkups. The institution is speeding on its plans to unfastened Village Medical clinics astatine existing Walgreens drugstores. The extremity is to person astatine slightest 600 superior attraction clinics successful much than 30 U.S. markets by 2025 and 1,000 by 2027.

Walgreens CEO Roz Brewer said successful an interrogation with CNBC's Bertha Coombs that the clinics volition simplify attraction for patients. She said Walgreens and VillageMD volition person pharmacists and physicians who enactment together. They volition person entree to the aforesaid tech level that pulls unneurotic aesculapian records. And they'll beryllium astatine a convenient location, a abbreviated locomotion oregon thrust away.

"Your doc recommendations are being shared straight with the pharmacist," Brewer said. "I deliberation that's a crippled changer erstwhile you deliberation astir what we're capable to do."

Most of the clinics volition beryllium astir 3,300 quadrate feet — astir a 4th of the drugstore's mean size of 13,500 quadrate feet.

Walgreens has astir 9,000 stores successful the U.S. and much than 75% of Americans unrecorded wrong 5 miles of 1 of them. Brewer said it plans to usage that footprint to scope radical who person fewer — if immoderate — adjacent doctors. It said it plans to unfastened much than fractional of its VillageMD clinics successful municipality neighborhoods and agrarian communities that are medically underserved.

Walgreens and VillageMD person said the doc offices volition judge antithetic kinds of wellness security and connection an out-of-pocket option, on with a sliding standard for radical who don't person insurance.

With the move, Walgreens is pursuing successful the footsteps of competitors, including CVS Health and Walmart. Many CVS stores already person a MinuteClinic, which administers vaccines and offers walk-in, urgent attraction appointments. CVS is besides turning much stores into a HealthHub, which has a wider scope of aesculapian services similar investigating for slumber apnea and absorption of diabetes. Walmart is opening a increasing fig of superior clinics with a low-cost model, but truthful far, they are concentrated successful Georgia, Florida and the Chicago area.

Walgreens and VillageMD person already opened 52 superior attraction session locations and person an further 33 connected way to commencement by the extremity of the calendar year. The institution announced the concern for the archetypal clip 2019 and decided to grow the effort aft a aviator of 5 clinics successful the Houston area.