Walgreens is plotting a big, multiyear expansion of its health services with primary care company VillageMD. Photo credit: Walgreens

Walgreens is targeting Texas, Arizona and Florida as the first markets for its plans to attach primary care clinics to pharmacies. The retailer announced plans to open 40 clinics by the end of next summer, as part of its partnership with Chicago-based primary care startup VillageMD.

Walgreens made an initial $250 million equity investment as part of the partnership, which is expected to grow to $1 billion in equity and convertible debt over the next three years. By the completion of its investment, Walgreens expects to have a 30% stake in the company.

In the next five years, they plan to open between 500 and 700 clinics attached to Walgreens stores. To start, they will be in Houston, El Paso and Austin, Texas; as well as Phoenix, Arizona and Orlando, Florida. Walgreens piloted the concept in Houston, where it currently has five clinics open.

After seeing promising results, Walgreens opted to move forward with the model. The idea was to integrate VillageMD’s primary care services with its pharmacy to better care for patients with chronic conditions.

“In today’s complex healthcare environment, this integrated model of care is more important than ever. When patients adhere to the appropriate care and medication regime, health outcomes improve,” VillageMD CEO Tim Barry said in a news release.

In a previous interview, Barry shared an example for how this would work if a patient was taking several different medications. A pharmacist could do a complete medication review and sync them up so they all have the same refill date.

Other retailers are also looking to build out more primary care attached to their stores. CVS Health, which already has well over 1,000 MinuteClinics, is rolling out a new stores model that has more square footage dedicated to healthcare. It has opened or remodeled 450 of these stores, which it calls HealthHUBs, and plans to have 1,300 of them by the end of 2021.

Walmart has also been building out its own primary care clinics, which are integrated with other services, such as dental, counseling and labs. It currently has 14 of these health centers open, largely clustered in Georgia, according to the most recent tally by Boston-based retail health consultant James Gardner. The company also plans to expand into Florida next year, with at least seven locations slated to open in Jacksonville.