Retail Giants Seize Another Healthcare Opportunity

Walgreens Follows CVS Into Clinical Trials Market

We often think of pharmaceutical or life sciences companies as having the most sophisticated tools and technologies available, given the complexity and technology needed to create new molecules capable of impacting activities within our body systems. So it seems surprising that despite these tools, they have never been particularly successful at recruiting and retaining patient subjects for their clinical research trials (CRTs).

Just how big is the recruitment challenge?

Consider that despite the intensely focused efforts and resources of well-established contract research organizations (CROs), which are companies that exist specifically to execute CRTs on behalf of life sciences companies, 80% of trials still fail to meet enrollment timelines, and one-third of Phase III trials are terminated due to insufficient subject enrollment[1]. These recruitment and retainment challenges contribute to the cost of bringing a new drug to market, that can cost as much as $2 billion and take as long as 7.5 years[2].

The scale of the opportunity is immense, and both CVS and Walgreens seem to believe they know how to take advantage of it. Curiously, their strategies seem nearly identical. CVS announced its CRT initiative in May 2021; Walgreens announced the same just last month. Both companies state the goals of:

• Faster recruitment of subjects through their retail locations, that will also serve to enhance diversity of recruitments, particularly those in underserved communities.
• Improved retention by a more patient-centric trials strategy that incorporates technology from decentralized trials like telehealth and home visits.
• More targeted recruitment by leveraging their internal data assets enhanced with external patient datasets, acquired through their acquisitions and partnerships with players in the real-world data/real world evidence markets.
• Better access to trials for patients who are more complex or suffer from chronic diseases that would otherwise make participation logistics too challenging.

Their retail footprints throughout the U.S. are also similar. CVS has 11,000 stores[3], 70% of the US population lives within 3 miles of a CVS[4], and over 40% of vulnerable communities live within 5 miles[5]. Walgreens has 9,000 locations, 75% of Americans live within five miles of at least one retail location, and over half of stores are within socially vulnerable communities[6].

Both pharmacy retail giants have also been gaining experience in clinical care for some time now. CVS acquired MinuteClinic in 2006 and became the first retail medical clinic in history to earn accreditation from the Joint Commission that same year[7]. MinuteClinic is core to CVS’s retail health strategy and has expanded to nearly 1,100 locations. More recently, CVS has launched HealthHUBS locations that offer enhanced wellness offerings. 

Walgreens became the majority shareholder of former competitor Boots Alliance in 2014 and offers Health Corners and VillageMD medical retail clinics at numerous locations, including inside of Walmart store locations. Walgreens recently invested another $5.2 billion in VillageMD, a primary care company focused on value-based care, and became the majority shareholder of CareCentrix, a home health care company, last year.

The similarities continue with their respective telehealth investments and acquisitions. In 2017, CVS invested $69 billion in Aetna. In 2021, CVS launched Aetna Virtual Primary Care to provide payer-backed telehealth services to members. Walgreens has partnerships with Doctor on Demand, 98point6, and recently acquired MeMD, all of whom provide telehealth services.

There are yet more parallels with respect to their patient data assets. CVS, with its Aetna acquisition, had a combined 130 million patient lives worth of data[8], and this does not include the data now available by way of their recent partnership with digital health company Medable, which provides a clinical trials platform that is widely used by many CROs. Medable itself has had a spectacular year of growth, partnering last year with Segster, a company that specializes in real world data aggregation and analysis from sources that include EHRs, genomic data, and wearable devices[9]. Walgreens recently established a partnership with Pluto Health, a health data platform startup that aggregates medical, lab, and pharmacy data, providing them access to about 280 million unique patient records.

Interestingly, we begin to see the divergence in strategy emerge when we explore their respective COVID-19 vaccination programs. CVS took a high tech-focused approach by partnering with Verily (owned by Alphabet, Google’s parent company) on a collaborative enterprise to offer COVID testing and vaccinations – and capture vast amounts of data, administering 59 million vaccinations to date[10]. More recently, CVS began developing an omnichannel customer strategy, and recently filed for a trademark with the U.S. Patent Trade Office, to allow it to sell goods and services in the ‘metaverse’[11]. The filing states intent to establish an online store, and the creation of downloadable virtual goods using blockchain technology with assets sold as non-fungible tokens (NFTs). In parallel, they are transitioning some of their in-store health services to a virtual care setting. The omni-channel strategy is indeed aiming to meet the consumer wherever they are, in this world or otherwise.

Walgreens administered an impressive 63 million vaccinations, of which 43 million were administered to individuals in ‘socially vulnerable areas'[12]. In sharp contrast to CVS, Walgreens has emphasized their success in overcoming vaccine resistance, through a grassroots efforts-driven strategy of education and empowerment. This has clearly bolstered Walgreens confidence in their ability to continue building on community trust as an engine of engagement, particularly within marginalized communities, where distrust of the medical community remains high, and where research trial recruitment has historically been all but non-existent.

While both pharmacy retail giants bring similar strengths to the CRT market, there is the divergence in their ‘last mile’ where the company-customer connection occurs. The high technology world in which CVS is scrambling to get a foothold is not one that will be equally accessible to all communities. Walgreens knows this and believes that with diversity of recruitment being one of the most valuable goals for life sciences companies, that they hold a strong advantage within many of these communities where the footprints of the two giants overlap.

Is there room for both in the CRT sector? Which company will ultimately find greater success? Only time will tell, but surely, the growing focus on addressing health-specific inequities within our societies is encouraging.

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[1] https://www.cbinsights.com/research/clinical-trials-ai-tech-disruption/

[2] https://aspe.hhs.gov/reports/examination-clinical-trial-costs-barriers-drug-development-0

[3] https://www.healthcarefinancenews.com/news/cvs-close-900-stores-over-three-year-period

[4] https://www.healthcarefinancenews.com/news/cvs-health-goes-deeper-consumer-centric-care-opening-another-1500-healthhubs

[5] https://pharmaphorum.com/news/cvs-medable-alliance-aims-to-tackle-diversity-in-clinical-trials/

[6] https://www.centerwatch.com/articles/26171-walgreens-enters-clinical-research-game-launching-trials-program

[7] https://www.cvs.com/minuteclinic/visit/about-us/history

[8] https://pharmaphorum.com/r-d/on-clinical-trials-day-cvs-shares-lessons-learned-from-one-year-providing-trial-services/

[9] https://www.mobihealthnews.com/news/cvs-teams-decentralized-clinical-trial-company-medable

[10] https://www.cvs.com/immunizations/covid-19-vaccine

[11] https://www.healthcarefinancenews.com/news/cvs-files-patent-sell-goods-and-healthcare-services-metaverse

[12] https://www.fiercehealthcare.com/providers/pharmacy-retail-giant-walgreens-looks-disrupt-clinical-trials-business-it-builds