Walgreens And CVS Aren’t Done With Primary Care Buying Binges

It appears Walgreens Boots Alliance and CVS Health aren’t done gobbling up primary care and related outpatient assets even after spending billions of dollars in the last two years.

The latest report on merger and acquisition activity came over the weekend from Bloomberg News which said VillageMD, a primary care company Walgreens has invested $6 billion in, is looking to merge with Summit Health. Primary care provider Summit Health merged with CityMD in 2019 to create a company with more than 1,400 healthcare providers that offer primary, specialty and urgent care.

Walgreens last year invested another $5.2 billion into VillageMD to escalate the rollout of hundreds of doctor-staffed clinics at its drugstores under its fast-growing “Walgreens Health” business. That investment gave Walgreens a stake of more than 60% in VillageMD.

Meanwhile, CVS Health has been doing some wheeling and dealing of its own. Most notably, CVS two months ago beat out Amazon and other companies for the home care company Signify Health for $8 billion. In buying Signify Health, CVS Health is adding to its growing menu of healthcare services that includes more than 9,000 retail drugstores, 1,100 MinuteClinics staffed by nurse practitioners and the nation’s third largest health insurer, Aetna.

But CVS, which is expected to provide an update on its ongoing healthcare expansion strategy later this week when it discusses its third quarter earnings, has told Wall Street analysts and investors it also wants to add to its primary care assets.

“We can’t be in primary care without M & A,” CVS chief executive Karen Lynch told analysts in August during the company’s second quarter earnings call. “We are being very disciplined both strategically and financially.”

Some have mentioned CVS as possibly interested in purchasing Cano Health, but those reports have died down lately.

Meanwhile, Lynch has said the company will “enhance our health services in three categories: primary care, provider enablement and home health.”

Source: https://www.forbes.com/sites/brucejapsen/2022/11/01/walgreens-and-cvs-arent-done-with-primary-care-buying-binges/