The pharmacy retail giant appointed healthcare leadership veteran Tim Wentworth as CEO in October.
Walgreens invested $5.2 billion and became the majority stake owner in VillageMD in October 2021 as part of a broader effort to turn its stores into healthcare destinations. Competition between giant pharmacy retailers Walgreens and CVS Health, as well as Amazon, Walmart and Optum, has driven disruption in primary care in the U.S. through increased access, virtual care and value-based care.
In 2022, Walgreens’ VillageMD acquired Summit Health-CityMD for close to $9 billion. Today, there’s 680 VillageMD locations, including 200 clinics co-located with Walgreens, in 26 markets.
Roz Brewer, former Walgreens Boots Alliance CEO, told an audience at the HLTH conference in November 2022, “as soon as we were looking at life beyond the COVID-19 vaccination period and getting into this endemic role in our lives, it was important to think about what’s the next growth venture for this company because dispensing of pharmaceuticals is not going to be our long-term growth avenue.”
She told the HLTH audience that Walgreens would be very aggressive to set up a healthcare continuum and deliver healthcare services through a brand everyone knows. Walgreens operates over 9,000 stores in the U.S.
But as the giant pharmacy retailer prepared to move from acute-based care to more long-term care, a change in leadership was announced. The company, its board of directors and Brewer mutually agreed that Brewer would step down as CEO on Aug. 31.
Search for deep healthcare experience
Walgreens appointed Tim Wentworth as its new CEO in October. Wentworth was previously CEO of pharmacy benefits manager (PBM) Express Scripts before Cigna acquired it and he served as CEO of Cigna’s health services unit before retiring in 2021. He brings nearly three decades of healthcare leadership experience to Walgreens.
Stefano Pessina, Walgreens’ executive chairman, said the board and leadership team focused on a search for someone with deep healthcare experience. Walgreens’ shares were down almost 40% in 2023 before Wentworth was appointed as CEO.
Consumers have shifted their habits for purchasing items like toothpaste and shampoo to Walmart and Amazon, and Walgreens also saw a drop in demand for COVID-19 testing and vaccines. In fiscal third-quarter earnings, the giant pharmacy retailer missed Wall Street projections for the first time since July 2020.
Lisa Gill, an analyst for J.P. Morgan, said in a note that Wentworth’s strong track record in healthcare services should provide a solid base for understanding much of the nuance that Walgreens is navigating.
Pearl Health partnership strengthens commitment to healthcare
To accelerate its expansion of value-based care, Walgreens teamed up with Pearl Health in September to collaborate with community-based primary care physicians. Walgreens provides complementary services, including prescription fulfillment, medication adherence, immunizations, care gap closure and diagnostic testing, and it also works with providers to help patients discharged from the hospital transition to home.
“Walgreens is committed to being the partner of choice for providers and health systems looking to transition quickly and effectively to value-based care and improve outcomes in the communities they serve,” said John Driscoll, executive vice president and president, U.S. Healthcare, Walgreens Boots Alliance, in a statement. “Our partnership with Pearl Health allows us to reach more communities faster.”