By: Michael White

Despite most recent headlines focusing on the ongoing development of a COVID-19 vaccine and continued search for therapeutic options that can reduce the severity of disease, two recent announcements demonstrate that the delivery of healthcare as we know it is continuing to evolve. Amazon’s announcement that they were entering healthcare during the summer of 2017 initiated a cascade of both reactive and proactive actions from mainline traditional healthcare providers as they have moved to protect and grow their bottom lines.

The first announcement comes from traditional healthcare mainstay, Walgreens and their decision to invest up to $1 billion in its primary care clinic partner, VillageMD. Walgreens first announced a partnership with VillageMD in November 2019 following its decision to close the majority of its in-store health clinics. The partnership with VillageMD is designed to offer a more comprehensive suite of primary care services than what was previously offered or is offered by the CVS MinuteClinic and are more comparable to their recently announced CVS HealthHubs. The new locations will be adjacent to existing Walgreens locations and offer annual preventive care, women’s health services, vaccinations, diagnostic testing, smoking cessation, chronic care management, and some specialty care. The expanded partnership will open 500 to 700 “Village Medical at Walgreens” locations in more than 30 U.S. markets in the next five years, with the intent to build hundreds more thereafter. 

Walgreens will initially invest $250 million with an additional $750 million over the next three years and will hold an ownership stake of ~30% at completion. It appears existing investors and the VillageMD team may be taking some money off the table, as 80% of the initial investment will be used to fund the opening of the clinics and build the partnership, including integration with Walgreens digital assets.

The second announcement, or set of announcements, comes from a company less traditionally associated with healthcare but definitely discussed alongside Amazon, Walmart. Over the last month, Walmart has announced plans to expand the number of Walmart Health clinics, sell supplemental Medicare insurance, formed a partnership with a Capital RX, a prescription benefit manager (PBM), and acquired prescription management technology from CareZone. The acquisition of medication management software from CareZone could be interpreted as a direct response to having lost out to Amazon in its bid to acquire PillPack. 

Walmart Health is set to offer pharmacy services, vision care, X-ray and EKG, community health programs and counseling, in addition to the physical pharmacies, prescription ordering, and delivery capabilities that it already provides. As the third largest operator of pharmacies in the US behind only CVS and Walgreens, Walmart continues to look for ways to take advantage of the nearly 1.5 million daily consumer visits to its locations. 

As the impact of Amazon on healthcare continues to drive changes across verticals, please reach out to our team to discuss potential implications for your business or sector.