Walgreens takes another stab at retail clinics with VillageMD partnership

Company will invest $1 billion to open 500-700 clinics at its pharmacies over five years


Only last year, Walgreens Boots Alliance (WBA), was partially exiting the retail clinic business, giving up some 160 self-administered clinics while maintaining about 200 clinics operated by others in Walgreens pharmacy locations. Now, it has announced a $1-billion equity and growth investment in VillageMD, an operator of full-service clinics, with a goal of adding 500-700 sites co-located with Walgreens pharmacies.

VillageMD currently operates around 1,000 clinics in the metro areas of nine states: Texas, Arizona, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan and New Hampshire. WBA says that 50% of the future locations will be in Medically Underserved Areas/Populations, a designation of HHS. VillageMD’s model is to provide primary care (it has 2,800 physicians in its network) as well as telehealth and at-home services, with the promise of more economical care and higher adherence to therapy.

The retail clinic model, when aligned with a pharmacy store, has been a compelling idea for the better part of a decade, but the results to date have been mixed. According to press reports, the number of retail clinics has topped out at around 2,000; roughly half of those are CVSHealth Minute Clinics. The idea has been that more prescriptions will be filled, and more foot traffic through the pharmacy floor, occurs when patients have just seen a healthcare provider who works adjacently. These days, urgent-care clinics (generally, not co-located with a pharmacy) and the outpatient services of large health systems, are competing for the same patient opportunity.

There is potential for the retail clinic model to offer a new or at least different distribution channel for pharma, in that devices (such as automated injectors), drugs and patient assistance can all be provided while physicians are involved. How significant this will be remains to be seen.