Walgreens plans to open hundreds of full-service doctor offices at its stores as it aims to become the first national pharmacy chain to offer primary care clinics.
The Deerfield-based pharmacy giant is doing so thanks to a $1 billion investment in VillageMD, a Chicago startup that works with physicians to provide technology, operations, staffing support and other tools to help reduce the overall cost of care.
The $1 billion investment, which comes in equity and convertible debt, will take place over the next three years, the companies announced. It includes a $250 million equity investment that will be completed today. Walgreens will hold a roughly 30% ownership stake in VillageMD at the completion of the investment.
The care clinics will operate under VillageMD's Village Medical subsidiary, which works to provide primary care for patients at traditional free-standing clinics.
Walgreens said it plans to open between 500 and 700 “Village Medical at Walgreens” primary care clinics in more than 30 U.S. cities over the next five years, and build "hundreds more" after that.
The expanded partnership comes after Walgreens and VillageMD first launched five in-store clinics in Houston last year. Most of the clinics will be around 3,300 square feet, Walgreens said, with some 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.
VillageMD, founded in 2013 by health care veterans Tim Barry and Clive Fields, raised a $100 million Series B round last year. With the $250 million equity investment announced today, the startup has raised over $465 million to date.
"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,” Barry said.
