The pharmacy giant is investing $1 billion in VillageMD, which is a Chicago startup that is working with physicians to provide the technology, operations, and staffing support along with various other tools that could help to reduce the overall cost of care.
This investment will take place over the next 3 years, and it includes a $250 million equity investment that was just completed; Walgreens will hold 30% ownership stake in VillageMD at the completion of the investment. VillageMd was founded in 2013, and the company raised a $100 million series B round last year; with the $250 million in equity investment recently announced the start up has raised over $465 million.
“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,” said Tim Barry who is one of the founding health care veterans.
These care clinics will operate under VillageMD’s Village Medical subsidiary which provides primary care for patients at traditional free standing clinics. There are plans to open between 500-700 of these clinics in over 30 American cities over the next 5 years, with plans for hundreds more after that.
“Of (Walgreens) investment, 80% will be used by VillageMD to fund the opening of the clinics and build the partnership, including integration with Walgreens digital assets,” Walgreens said in a statement release.
Walgreens and VillageMD have partnered to begin the launch last year with the opening of 5 such in store clinics in Houston. According to Walgreens most of these clinics will be around 3,300 square feet with some of them being as large as 9,000 square feet.
“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,” Stefano Pessina, executive vice chairman and CEO of Walgreens Boots Alliance, said in a statement.
This Walgreens expansion comes as rivals are also rolling out their own primary care expansions. CVS Health is opening 1,500 HealthHub store formats with more options to complement its established MinuteClinics. Additionally, Walmart is also opening more Walmart Health centers that will feature an array of primary medical services, dental and behavioral health services as part of its new care model.
