Ten years after acquiring its competitor Duane Reade, Walgreens has set its sights on a whole different type of growth, announcing its plan to establish doctor’s offices in hundreds of its familiar brick-and-mortar stores. They aim to open as many as 700 primary care clinics in the next five years. The announcement makes the 119-year-old drugstore giant the newest major player in retail medicine. It seems assured that retail medicine will become a mainstay not long after wide-scale in-person business restrictions are lifted post-COVID.
For Walgreens, this is part of a telling new business model. While the chain has been closing stores and laying off employees, the focus on medical care is part of a large-scale effort to evolve its in-and-out convenience stores into health-and-wellness venues, where people will be inclined to spend more time (and money). Walgreens is partnering with VillageMD, a primary care company that will staff and run the in-store clinics.
Some of the other giants have already made similar moves. CVS is planning to open 1,500 HealthHUBS—redesigned CVSes with a focus on healthcare services and products—by the end of 2021. WalMart has plans to open more primary care clinics (it already has four), which deliver on the brand’s promise of upfront pricing and low costs. And last year, Amazon already began marketing its prescription drugs after acquiring the online pharmacy Pillpack the year before. Explaining that demand for retail healthcare destinations remains high, Walgreens COO Alex Gourlay highlighted that 6 in 10 American must manage multiple medications for at least one chronic condition.
In a similar vein, VillageMD CEO Tim Barry said this new store model can improve health outcomes, and especially for people with chronic diseases. Plus, the comparative ease of early intervention—thanks to the ongoing relationship between in-store clinicians and the patients in their community—decreases the risk of going to the emergency room and lowers overall utilization costs.
Combating social determinants of health, most of the new Walgreens clinics will open in areas with significant underserved populations, including people who are elderly and poor.
