Walgreens just cut a huge check for Chicago healthtech company VillageMD.
On Thursday, Walgreens Boots Alliance — which owns pharmacy chain Walgreens and U.K. chain Boots — announced that it was investing $5.2 billion into VillageMD. This follows WBA’s $1 billion investment into VillageMD from last year, and officially makes WBA the majority owner of VillageMD — bringing its ownership stake from 30 percent to 63 percent.
VillageMD provides physicians with tools, technology, staffing and data in order to reduce healthcare costs and deliver value-based care. VillageMD also operates over 230 in-person practices, where patients can receive primary care visits from physicians using the VillageMD model.
Thanks to an earlier partnership with WBA, many of these in-person clinics are in or attached to a Walgreens retail location. This gives VillageMD a huge network for potential in-person clinics.
The $5.2 billion investment will allow VillageMD to open new clinics across more than 30 U.S. markets. The company says that it aims to open at least 600 new locations by 2025, and 1,000 locations by 2027. WBA says that over 75 percent of Americans live within five miles of a Walgreens location. So by leveraging the Walgreens retail network, VillageMD will be able to open clinics all over the country, and target communities that are medically underserved.
“The best healthcare is deeply rooted in local communities, and Walgreens is committed to expanding convenient access to high-quality and affordable healthcare services to our patients and customers in our neighborhood locations,” Walgreens Boots Alliance CEO Roz Brewer said in a statement. “VillageMD is a leader within the fast-growing, value-based primary care segment with high rates of patient satisfaction and a talented management team who share our strategic vision of the central role that primary care can serve to improve patient outcomes and lower costs.”
The investment also makes Walgreens the first U.S. pharmacy chain that offers both pharmacy and primary care services under one roof. Despite this, VillageMD will continue operating as a standalone company. VillageMD expects to bring in $1.3 billion in revenue this year, up from $217 million in 2017.
VillageMD also added that it plans to IPO in 2022.
“Over the past two and a half years, we have worked side-by-side with Walgreens to create an integrated primary care and pharmacy model that accomplishes one primary goal: better patient care. WBA’s investment supports our ongoing commitment to providing the highest quality healthcare to all patients, including many people who don’t currently have convenient access to a primary care provider,” VillageMD CEO and chairman Tim Barry said in a statement. “This expanded partnership helps us accelerate our mission to deliver the best healthcare in the world.”
