As Walgreens and Walmart make the decision to scale back their investments in physician-staffed health clinics, they are turning their focus towards the lucrative business of specialty pharmacy. Walmart recently announced the closure of its Walmart Health centers and virtual care business, opting to shift its efforts towards pharmacy and specialty pharmacy services. This move comes as specialty pharmacies play an increasingly important role in the U.S. healthcare system, especially with the rise of expensive biotechnology-derived drugs that require specialized handling and administration.
In a similar vein, Walgreens also made a strategic decision to launch Walgreens Specialty Pharmacy, a $24 billion business that will include a new pharmacy equipped to handle gene and cell therapies. This move is part of a larger effort by Walgreens CEO Tim Wentworth to focus on providing more healthcare services in stores while enhancing the profitability of its pharmacy operations. With specialty medications accounting for a significant portion of total pharmacy spend in the U.S., pharmacies like Walgreens are recognizing the growing demand for these complex drugs and the potential for financial growth in this sector.
The rising costs of specialized medications are impacting the overall healthcare landscape in the U.S., with specialty drugs accounting for a significant portion of employer-based health insurance coverage. New medications like Ozempic and other injectable specialty drugs are contributing to increased costs for employers, with weight loss drugs alone driving up healthcare expenses by over $300 per insured worker. As a result, pharmacies like Walgreens and Walmart are positioning themselves to meet the growing demand for specialty medications and capitalize on the financial opportunities in this sector.
Representatives from major pharmacy chains such as Walgreens, Walmart, CVS Health, and Amazon recently attended the 20th annual Asembia AXS24 conference in Las Vegas, signaling the importance of specialty pharmacy in the industry. The conference, which drew over 8,000 attendees, highlighted the continued growth and expansion of pharmacy services, particularly in the realm of specialty medications. Walmart emphasized its commitment to providing essential healthcare services through its pharmacies, including immunizations, testing and treatment services, access to specialty pharmacy medication, and medication therapy management to address the healthcare needs of underserved communities.
The shift towards specialty pharmacy reflects a larger trend in the healthcare industry, where pharmacies are increasingly becoming key players in providing specialized medications and services to meet the evolving needs of patients. As healthcare costs continue to rise, particularly due to the high prices of specialty drugs, pharmacies like Walgreens and Walmart are adapting their business strategies to capitalize on the growing demand for these medications. By investing in specialty pharmacy and focusing on the more profitable aspects of their operations, these pharmacies are positioning themselves for success in an increasingly competitive market.
Overall, the move towards specialty pharmacy by major retailers like Walgreens and Walmart highlights the changing landscape of the healthcare industry, with a growing emphasis on specialized medications and services. As pharmacies continue to play a crucial role in providing healthcare services to patients, the shift towards specialty pharmacy represents a strategic opportunity for these retailers to meet the evolving needs of consumers while also maximizing the financial potential of this sector. With specialty drugs becoming a significant driver of healthcare costs, pharmacies are positioning themselves to meet this demand and drive growth in their businesses.
