echemi logo
  • Product
  • Supplier
  • Inquiry
    Home > Active Ingredient News > Drugs Articles > VillageMD acquires Summit WBA for $9 billion to strengthen its healthcare strategy

    VillageMD acquires Summit WBA for $9 billion to strengthen its healthcare strategy

    • Last Update: 2022-12-04
    • Source: Internet
    • Author: User
    Search more information of high quality chemicals, good prices and reliable suppliers, visit

    For the pharmaceutical retail industry, strengthening the main business by entering health management is the norm, but in the US market, pharmaceutical retail giants are entering the medical service industry
    in a big way like insurance companies.

    If CVS acquired Aetna, the insurance business, especially Medicare, a commercial product of medical insurance Advantage has a strong need to
    integrate its healthcare business.
    Pharmaceutical retail giants like Walgreens (WBA) don't have insurance businesses, and the need for consolidation is not as strong
    But retail giants such as WBA and Walmart have aggressively acquired and developed medical services businesses, which has become a growing trend
    in the U.

    Similar to CVS, the WBA founded Walgreens Health, with a focus on rapid clinics and home care services
    Due to missing the early window of time to expand the rapid clinic through self-construction, the WBA mainly completed the layout through mergers and
    First, in 2021, he increased his stake in VillageMD from 30% to 63% for $5.
    2 billion, resulting in a nationwide rapid clinic business and the ability to
    build a medical service facility in pharmacies.
    In 2022, it also supported VillageMD's $9 billion acquisition of Doctor Group and Emergency Medical Center Summit Health
    。 Summit Health not only owns an independent physician group, but also a chain of emergency medical centers, CityMD.

    Upon completion of the acquisition, VillageMD will grow from the current 310 stores to 680 and will drive the WBA to open 200 new rapid clinics
    VillageMD had revenue of $1.
    3 billion in 2021, compared to just $217 million
    in 2017.

    On the other hand, WBA acquired 55% and 45% of CareCentrix shares in two installments in 2022 for US$330 million and US$392 million, respectively, and eventually wholly owned the home care provider
    CareCentrix's business includes not only home care, but also management services for insurance companies and hospitals to reduce readmissions rates, from discharge to home rehabilitation
    CareCentrix has 7,400 service locations serving more than 19 million people and generated $1.
    5 billion
    in revenue in 2021.

    Similarly, retail giant Walmart is also massively expanding primary care, opening several one-stop outpatient centers in states such as Florida, offering not only outpatient services, but also third-party examinations, and even dental and eye services

    In fact, the entry of retail into medical services is not a whim, but is closely related to
    the market seismic driven by value-based healthcare in the United States.

    After the implementation of value-based care, the payer strictly evaluates the patient's readmission rate, and if the patient is repeatedly admitted, the medical institution will be fined
    This forces medical institutions to start paying attention to the status of patients after discharge and better manage these people
    Because patient outcomes are directly linked to hospital revenue and profits, hospitals are motivated to analyze data on these patients, identify the most at-risk patients, and minimize their re-incurring of high-spending items, such as entering the emergency room and being admitted to the hospital

    Therefore, the treatment effect of the hospital is not only determined by the treatment effect of the hospital itself, but also depends on whether the patient receives continuous attention and necessary medical services such as rehabilitation and nursing after
    The quality of out-of-hospital care also determines the patient's future risk
    Hospitals have an incentive to work with payers to promote out-of-hospital medical service collaboration and jointly ensure treatment outcomes
    This takes disease management from in-hospital treatment to out-of-hospital services
    Out-of-hospital services include ongoing treatment (outpatient, specialist, family doctor), rehabilitation services, nursing and other post-acute services

    On the other hand, in the outpatient field, rapid clinics and emergency treatment centers are the biggest beneficiaries of the cost control drive, especially emergency medical centers
    To reduce non-essential emergency room users, payers are using a variety of tactics to drive access to emergency medical centers, such as Anthem (now Elevance) that no longer reimburses emergency room fees
    in some states.
    Of course, Anthem's approach is just an extreme example, but the trend of payers diverting users from emergency rooms to emergency medical centers will become stronger
    The development of Fast Clinic is more to meet the needs of new users who do not have family doctors, especially those who have purchased high deductible insurance, of course, including some minor disease users
    who cannot wait to make an appointment.

    Driven by these two aspects, the US basic medical sector has become the hottest medical investment and M&A field
    after digital healthcare.
    The 2022 mergers and acquisitions alone saw several large mergers and acquisitions, in addition to the large acquisitions opened by the WBA, CVS acquired Signify for $8 billion Health, Amazon's $3.
    9 billion acquisition of One Medical are all recent market highlights

    Therefore, although there is no insurance company itself to integrate medical services with insurance, the addition of medical services can help to gain a favorable position in the overall value-based medical market, which is the fundamental reason
    why pharmacy giant WBA has entered medical services on a large scale.
    Of course, the development of medical services and drug sales are still closely coordinated, for example, VillageMD claims that its services have greatly improved medication adherence for patients with three high chronic diseases, reducing hospital admissions by 28% and emergency room utilization by 46%
    compared with benchmark indicators.

    In general, in the medical market dominated by value-based medicine, it is difficult for retail pharmacies to have long-term competitiveness if they only sell drugs, and large-scale entry into medical services is a development measure to comply with market trends, and the integration of drugs and services will also help improve their ability to cooperate with payers

    This article is an English version of an article which is originally in the Chinese language on and is provided for information purposes only. This website makes no representation or warranty of any kind, either expressed or implied, as to the accuracy, completeness ownership or reliability of the article or any translations thereof. If you have any concerns or complaints relating to the article, please send an email, providing a detailed description of the concern or complaint, to A staff member will contact you within 5 working days. Once verified, infringing content will be removed immediately.

    Contact Us

    The source of this page with content of products and services is from Internet, which doesn't represent ECHEMI's opinion. If you have any queries, please write to It will be replied within 5 days.

    Moreover, if you find any instances of plagiarism from the page, please send email to with relevant evidence.