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Walgreens (WBA), VillageMD State 2021 Primary Healthcare Goal

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Walgreens Boots Alliance (WBA - Free Report) recently announced an update to its existing strategic collaboration with VillageMD to provide primary healthcare services. Per the latest update, the company announced plans to open 29 new Village Medical at Walgreens practices in Houston, Austin and El Paso in 2021.

With this, the companies are on track to achieve their January 2021 goal of opening at least 600 Village Medical primary care practices in more than 30 U.S. markets over the next four years. This remains part of Walgreens Boots’ $1-billion accelerated investment effort under which it will provide advanced healthcare, combining Village Medical primary care physicians and Walgreens pharmacy services through an integrated care delivery model.

Added to this, both the companies have expanded their coordinated care model, which will help Village Medical patients to access the same type of pharmacy services like between-visit refills, medication substitutions, and comprehensive consultations from select Walgreens sites that do not have a collocated Village Medical.

Strategic Significance

Having physicians and pharmacists under the integrated model will benefit from improved health outcomes at affordable cost. Per the company’s January update, Walgreens is the first national pharmacy chain to offer full-service primary care clinics co-located at its stores at a large scale. Till Jan 6, 2021, Walgreens Boots completed $750 million investment.


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According to the company, in Austin, El Paso and Houston, there are more than 825,000 patients (aged more than 65) within five miles of a new or planned Village Medical at Walgreens. The integrated model combining Village Medical primary care services and Walgreens pharmacy services will facilitate regular and direct communication with patients, thereby helping in delivering improved health outcomes and affordable care.

With respect to the expanded coordinated care model, this program has been launched at all collocations and is also getting launched at nine non-collocations in the Houston and Phoenix areas. This facility will help patients find less expensive medication alternatives and manageco-pay costs.

According to Walgreens Boots, the pandemic has created significant barriersin terms of accessing care,which includesvarious difficulties that patients face while navigating through an already complex healthcare environment. At present, six in 10 Americans live with at least one chronic condition, with many needing multiple daily medications. In Texas alone, chronic diseases continue to make up the top three causes of death. In such a situation, the importance of this streamlined approach as introduced by Village Medical through Walgreens integrated model is of enormous importance.

This initiative  is expected to gain strong customer response immediately.

Price Performance

Over the past year, Walgreens has underperformed the industry it belongs to. The stock has gained 19.7% compared with the industry’s 26.9% rise.

Notable Developments

In June 2021, Walgreens Boots expanded its collaboration with Uber Technologies to provide retail products directly to customers via Uber Eats platform. The on-demand delivery service is now available from more than 7,800 stores across the United States, with plans to add Puerto Rico soon.

In May 2021, Walgreens introduced mobile clinics and same-day appointments, ensuring ease of access to COVID-19 vaccines across the country. Walgreens will activate multiple mobile clinics in Chicago. Notably, the mobile clinics aim to bring COVID-19 vaccines directly to underserved communities and to those who face difficulty in accessing the vaccine.

In the same month, Walgreens launched contactless,“Same Day Delivery,” offering customers more convenient, safe and easy shopping solutions in less than two hours for retail products. Now customers are able to order more than 24,000 items directly from Walgreens for Same Day Delivery nationwide.

Zacks Rank and Key Picks

Currently, the company carries a Zacks Rank #3 (Hold).

A few better-ranked stocks from the broader medical space are Envista Holdings Corporation (NVST - Free Report) , BellRing Brands, Inc. (BRBR - Free Report) and Baxter International Inc. (BAX - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of Zacks #1 Rank (Strong Buy) stocks here.

Envista Holdings has an estimated long-term earnings growth rate of 26%.

BellRing Brands has an estimated long-term earnings growth rate of 22%.

Baxter International has a projected long-term earnings growth rate of 9%.

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