Walgreens to launch 40 primary care clinics by third quarter of next year

Dive Brief:

  • Walgreens Boots Alliance plans to open 40 on-site primary care clinics by the third quarter of 2021, including sites in Houston that are already online and some in Phoenix opening this month. The clinics will be operated as part of an agreement with VillageMD, which is providing medical personnel to staff the sites.
  • Other sites will be in El Paso, Texas and Orlando, Florida. The clinics rely on pharmacists, physicians and nurses to provide medical services and advice to customers.
  • The openings are part of Walgreens’ long-term plan to open as many as 700 primary care clinics in more than 30 U.S. cities and metropolitan areas over the next five years. The company’s stock rose this week after the announcement.

Dive Insight:

Primary care clinics on the sites of retail pharmacies have grown considerably in recent years, although incrementally.

Walgreens moved to jumpstart the growth process earlier this year, announcing over the summer that it would invest up to $1 billion with VillageMD — including $250 million immediately — to open up primary care clinics at its pharmacies throughout the country, and take up to a 30% stake in the Chicago-based company.

Walgreens is starting to make good on that promise, with new openings occurring in Phoenix later this month and in other cities early next year. Telehealth services will also be available to people using a smartphone app. Such services are expected to remain in high demand in the coming months, driven by the persistence of COVID-19.

Meanwhile, competitor CVS Health has more than 200 of its health-focused stores open in 22 states and is on track to launch 1,500 by the end of next year. And Walmart has stepped up its health plays as well. The giant retailer expects to have 15 Walmart Health locations open by the end of this year.

Both companies are either in Florida markets as well or exploring footprints there.

Although the Walgreens/VillageMD clinics rely significantly on on-site pharmacists to provide services, VillageMD is recruiting more than 3,600 nurses and physicians to provide services to patients as well. Most services will have co-pays from zero dollars to $10.

“This integrated model of care is more important than ever. When patients adhere to the appropriate care and medication regime, health outcomes improve,” VillageMD CEO Tim Barry said in a statement.

Investors appear to be pleased with the announcement. Walgreens stock rose nearly 7.5% in trading on Thursday, although it is down nearly 30% for 2020 to date.