Walgreens Boots Alliance Inc. (NASDAQ:WBA) is expanding its footprint beyond the business of dispensing drugs. The pharmacy chain has inked a strategic partnership with VillageMD. Under the terms of the deal, VillageMD is to staff and run primary care clinics in Walgreens drug stores.
Walgreens –VillageMD Partnership
The plan is to open primary care clinics in 500 to 700 Walgreen stores over the next five years. The pharmacy chain is to invest $1 billion over the next three years. The investment will allow VillageMD to open the clinics and integrate technology.
Part of the $1 billion investment will go towards recruiting and paying employees who will run the primary clinics and cover other expenses. The $1 billion investment entitles Walgreens to a 30% stake in VillageMD.
With the new partnership in place, patients will visit Walgreens drug stores and get various medical services. The clinics will handle checkups and walk-in appointments. The clinics will come with exam rooms, a waiting room, and a physician room.
A strategic partnership with VillageMD comes at a time when Walgreens is increasingly cutting costs as it looks to focus on medical care. The pharmacy chain has already closed down a number of drug stores in the U.S having also laid off some staff.
The company has embarked on a restructuring drive as it looks to turn its drugstores into health and wellness facilities. The ultimate goal is to have a place where people can spend more time and money. For instance, it has already started leasing spaces, whereby it carries out eye and weight loss checkups.
A push into the medical care and wellness will not be easy for Walgreen. The company already faces stiff competition in the space. Walmart Inc. (NYSE: WMT), the world’s largest retailer, has already set up primary care clinics with plans to open more. Amazon.com, Inc. (NASDAQ: AMZN) is another tech giant looking to flex its muscle in the wellness space following the acquisition of Pharmacy Pillpak. Aetna, on its part, plans to open close to 1500 HealthHUB store by 2021.