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Walgreens is teaming up with the federal government on a multimillion-dollar gamble to diversify clinical trials.
On August 19, Walgreens announced a partnership valued up to $100 million with the Biomedical Advanced Research and Development Authority (BARDA), part of the Department of Health and Human Services (HHS), over a five-year span.
BARDA will use the chain’s clinical trial platform and pharmacy sites as part of its Decentralized Clinical Operations for Healthcare and Research (D-COHRe) program, according to a Walgreens press release.
The partnership is focusing on decentralized trials—which are done outside of traditional clinical sites and in real-world environments, like a patient’s home or local pharmacy—as a step toward solving what advocates say is a diversity problem in clinical trials. In 2020, only 8% of new drug trial participants were Black, for instance, according to a 2022 analysis that called for decentralizing sites and using digital tools to make trials more accessible for people who face barriers like a lack of reliable transportation.
In a bonus for Walgreens, this is also the latest in a string of contracts that utilize its clinical trial division that was launched in 2022.
Strategy shift. The partnership is an additional source of revenue for the chain as it undergoes a broader strategy shift.
“What it represents is a capital-light model that leverages the physical footprint, the assets, the trust, the engagement with our consumers,” Ramita Tandon, chief clinical trials officer at Walgreens, told Modern Healthcare.
In 2021 and 2022, the chain bet big on becoming a “consumer-centric” healthcare company, spending $5.2 billion to buy VillageMD primary care and billions more on several other care companies, Healthcare Brew previously reported.
Fast-forward three years, and that bet doesn’t seem to be paying off.
The chain’s June Q3 2024 earnings call was bleak: Walgreens reported a $13.1 billion operating loss for the first nine months of FY2024, with CEO Tim Wentworth warning that up to 25% of the chain’s approximately 8,600 stores could close over the next three years.
Walgreens also announced in March it planned to shutter 160 VillageMD clinics, and later said it would consider selling the primary care subsidiary altogether, according to an August 7 SEC filing.