- As Amazon enters pharmacy business, Walgreens Boots Alliance prepares to expand its relationship with UnitedHealth Group.
- The collaboration between UnitedHealth Group’s MedExpress urgent care centers and Walgreens has connected primary care with the corner drugstore in 15 locations across the U.S.
- Walgreens executives have said they are currently evaluating whether to broaden the relationship with UnitedHealth as well as whether to expand its collaboration with LabCorp.
With Amazon officially entering the pharmacy business, pressure may be emerging for Walgreens Boots Alliance to expand its relationship with UnitedHealth Group, which is developing urgent care centers attached to Walgreens pharmacies.
For now, the collaboration between UnitedHealth Group’s MedExpress urgent care centers and Walgreens has connected primary care with the corner drugstore in 15 locations across the U.S. The relationship to date has been considered a pilot.
But the UnitedHealth venture and other Walgreens pilots are suddenly taking on urgency among some investors after Amazon last week said it would buy the online pharmacy PillPack, potentially threatening Walgreens drugstore revenues should customers opt not to come inside a brick-and-mortar pharmacy.
Some observers think Walgreens should be taking steps to lock in more sales from their patients and customers as rival CVS Health is doing by buying Aetna, the nation’s third-largest health insurer. Because Aetna provides health benefits to more than 20 million Americans, the deal with CVS is expected to eventually bring those customers inside CVS drugstores for prescriptions and primary care services. CVS and Aetna have already been discussing developing more healthcare services like urgent care inside the drugstores.
Investors want Walgreens to escalate its partnership strategy and expand its pilots across the country.
“For us, the biggest issue is the lack of revenue diversification, which could make (Walgreens) more vulnerable to market share gains over the long term than CVS,” Mizuho Securities USA analyst Ann Hynes said in a report out this week.
Hynes suggested a “strategic relationship with a high-quality partner that drives customers to the retail stores” like UnitedHealth Group or the diagnostic test maker LabCorp, which has been working with Walgreens since last year to provide lab-testing services in its stores in limited areas of the U.S. The retail approach of UnitedHealth’s Optum healthcare delivery unit also includes not only the MedExpress urgent care facilities but ambulatory surgery centers, doctor practices and related locally based community health clinics.
Walgreens executives have said they are currently evaluating whether to broaden the relationship with UnitedHealth as well as whether to expand its collaboration with LabCorp.
“In the quarter, LabCorp opened a number of clinics in our Gainesville (Fla.) stores as part of the extension of the trials we have been running with LabCorp in the last months,” Walgreens president Alex Gourlay told analysts last week on the drugstore chain’s fiscal third quarter earnings call. “These clinics have performed well. As this relationship continues to prove advantageous for both partners, we are looking at how we can expand the service further and faster throughout our network.”
Date: July 5, 2018