Strength of Partnerships to Determine Walgreens’ Future

Even as its chief rivals, CVS Health and Walmart, continue to grow through acquisitions and by increasingly adding in-store health services, Walgreens Boots Alliance’s future will be determined by the strength of its partnerships inside and outside health care.

That’s the word from Stefano Pessina, Walgreens Boots Alliance CEO, speaking at the recent Forbes Healthcare Summit. Pessina said his company’s partnerships with Kroger, Microsoft and care providers like Humana’s Partners in Primary Care and VillageMD, which develops primary care clinics, are the best and most efficient way to transform.

Walgreens found itself in tough sledding after establishing wholly owned health clinics in 157 of its stores. In October, the retailer said it plans to close all of these in-store clinics. If the company decides to establish more in-store clinics, it will look for them to be run by third parties.

Financial analysts have been skeptical of Walgreens’ approach and whether it will generate sufficient revenue and margins to compete effectively against its rivals. It remains to be seen whether CVS Health’s plans to open 1,500 HealthHub clinics in its retail stores will prove that greater scale will equate to greater financial success.