Walgreens Partnership Strategy Won't End With Microsoft

A Walgreens store in Peoria, Ariz. in this June 25, 2018 file photo. Walgreens is joining drugstore competitor CVS Health in launching home deliveries for prescriptions nationwide, as stores continue adjusting to a retail world made more customer-friendly by online competition. (AP Photo/Ross D. Franklin, File)ASSOCIATED PRESS

The declaration by Walgreens Boots Alliance chief executive Stefano Pessina that the retail drugstore chain’s strategic partnership with Microsoft is designed to create a “seamless ecosystem of participating organizations” means more deals are likely ahead.

Walgreens has shied away from expensive acquisitions like CVS Health’s $70 billion purchase of Aetna, the nation’s largest third-largest health insurer, in favor of alliances, partnerships and joint ventures. Walgreens has used the partnership strategy as a way to test ideas before committing large amounts of capital and resources even with the well-capitalized online retailer Amazon scouting ways to enter the healthcare business.

The Walgreens-Microsoft partnership is designed to draw other healthcare providers and companies into an “ecosystem” Pessina says he wants to create. The companies said they plan to connect consumers to Walgreens U.S. pharmacists and Boots pharmacists around the world to drug makers, insurers and medical care providers in their communities. Partners will be big and small, Pessina said in an interview earlier this week.

“Together, we will reach out to other players in the space to create a true ecosystem that will really be able to facilitate the life of our customers,” Walgreens CEO Pessina said in an interview.

Microsoft and Walgreens say they will “leverage each other’s market research and identify the right partners to develop solutions.” As one example, they said “major health care delivery network participation will provide the opportunity for people to seamlessly engage in WBA health care solutions and acute care providers all within a single platform.”

In looking for medical care delivery partners, Walgreens already has relationships with Humana “Partners in Primary Care” centers that opened last year in Kansas City. The senior clinics Walgreens is developing with Humana are designed to complement the prescriptions and pharmacy services offered at Walgreens and a larger rollout beyond Kansas City is expected. In addition, Walgreens has a pilot program with UnitedHealth Group and its MedExpress unit to develop urgent care centers attached to Walgreens pharmacies.

Because Walgreens has more than 9,000 U.S. pharmacies, including relationships with big healthcare systems in many communities, it’s not going to be difficult for the retail pharmacy giant to open doors and sell whatever products are developed with Microsoft. Already, Walgreens and Microsoft plan to “explore the potential” to establish “joint innovation centers in key markets.”

And health systems may be interested in what Walgreens and Microsoft have to offer.

“Through a combination of dedicated R&D and external partnerships, a suite of chronic disease management and patient engagement applications are planned for development, alongside a portfolio of connected Internet of Things (IoT) devices for nonacute chronic care management, delivered by Microsoft’s cloud, AI and IoT technologies,” Microsoft and Walgreens said in their statement.

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