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Walgreens to open more than 500 VillageMD primary care offices within stores

The full-service doctor's offices will be in 30 U.S. markets, with the intent to expand.

Susan Morse, Managing Editor

Walgreens has become the latest retail pharmacy chain to expand into primary care.

Walgreens Boots Alliance has announced it is expanding its trial partnership with VillageMD to offer primary care services in colocations within 500 to 700 stores over the next five years.

Walgreens said it is the first national pharmacy chain to offer full-service doctor offices.

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Most of the clinics will be approximately 3,300 square feet each, with some as large as 9,000 square feet. They will optimize existing space in the store, which will also still provide retail products.

More than 50% percent will be located within Health Professional Shortage Areas and Medically Underserved Areas/Populations, as designated by the U.S. Department of Health and Human Services.

Under the terms of the new agreement, WBA will invest $1 billion in equity and convertible debt in VillageMD over the next three years, including a $250 million equity investment.

Of WBA's investment, 80% will be used by VillageMD to fund the opening of the clinics and build the partnership, including integration with Walgreens digital assets.

It is anticipated, assuming full conversion of the debt, that WBA will hold an approximately 30% ownership interest in VillageMD.

WHY THIS MATTERS

Retail pharmacies have been offering more clinical care, with CVS's HealthHubs a prime example of how companies are reaching consumers through the convenience of local stores.

Walgreens has more than 18,750 stores.

Walgreens' full-service primary care option competes directly with providers and hospitals that offer off-campus clinics.

The physician-led primary care clinics will be in more than 30 U.S. markets, and the company intends to build hundreds more. The clinics will integrate the pharmacist and will be staffed by more than 3,600 primary care providers, who will be recruited by VillageMD.

Data from current Village Medical clinics shows that an integrated pharmacy and primary care approach increases medication adherence and contributes to improved patient outcomes, Walgreens said.

Additionally, 24/7 care will be available via telehealth and at-home visits. 

The clinics will accept a wide range of health insurance.

THE LARGER TREND

The rollout follows a trial with five in-store clinics in the Houston, Texas area, which produced strong results after opening last November including high patient satisfaction, with Net Promoter Scores over 90, according to Walgreens.

VillageMD and Walgreens also recently announced the availability of Village Medical telehealth providers on Walgreens Find Care, an online platform that connects patients with a wide range of health services.

ON THE RECORD

"This rollout is a major advancement of one of Walgreens Boots Alliance's four key strategic priorities, Creating Neighborhood Health Destinations," said Stefano Pessina, executive vice chairman and CEO of Walgreens Boots Alliance. "These clinics at our conveniently located stores are a significant step forward in creating the pharmacy of the future, meeting many essential health needs all under one roof as well as through other channels."

"In the U.S., we spend $4 trillion per year on healthcare, over 85% of that is tied to patients with chronic diseases," said Tim Barry, chairman and CEO of VillageMD. "To improve our healthcare system and reverse the trajectory of health spending, we must meet the needs of all patients. This partnership allows us to unleash the power of primary care doctors and pharmacists, enabling them to work in a coordinated way to enhance the patient experience."

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com