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Sharon Terlep explains the latest efforts by Walgreens to become a healthcare provider by adding doctors offices to its pharmacies. She writes in the WSJ:
The largest U.S. drugstore chain by stores is pairing with primary-care provider VillageMD to open 500 to 700 clinics at Walgreens sites across the country over the next five years. Walgreens will pay VillageMD $1 billion in equity and debt over the next three years in exchange for a 30% stake in the Chicago-based startup by the end of that term.
Walgreens and rival CVS Health Corp. are in a race to become go-to treatment centers, particularly for patients with costly, hard-to-manage chronic conditions. Both chains are seeking new ways to counter smaller revenue from prescription drugs, which drive the bulk of their sales. They also are battling online rivals such as Amazon.com that have drawn shoppers away from physical stores.
Insurers and hospitals, meanwhile, have been expanding their clinics or buying up physicians’ practices, making more primary-care doctors employees of larger companies. For example, UnitedHealth Group Inc. has acquired a network of doctor practices, surgery centers and urgent-care clinics.
“We heard from patients that they trust their local doctor and they don’t like changing their doctor,” said Alexander Gourlay, Walgreens co-chief operating officer. “It became clear that you have to have a primary care doctor as part of the model both physically and digitally.”
Drugstores and doctors’ practices are getting hurt by the coronavirus pandemic. Patients are putting off visits to their health-care providers for fear of catching the virus during visits. Walgreens is part of a coalition behind a new ad campaign to encourage people to return to their medical providers as the pandemic continues.
