Walgreens Boots Alliance plans to invest $970 million in a company that helps hospitals and health systems with specialty pharmacy services, Walgreens announced Tuesday.
The investment in Massachusetts-based Shields Health Solutions will give Deerfield-based Walgreens a 71% ownership stake in Shields, with an option to acquire the remaining equity interests in the future. Walgreens made a minority investment in Shields in 2019.
Specialty pharmacies are those that often focus on costly medications for patients with complex conditions. Hospitals often have their own specialty pharmacies.
The deal is expected to close by February 2022, pending the conclusion of a waiting period required under antitrust law.
The deal will give Walgreens an opportunity to “further develop health system partnerships and coordinate care for those with complex, chronic conditions,” according to a Walgreens news release.
After the investment, Shields will continue to be managed under its current executive leadership, as its own brand.
The investment in Shields is in line with a number of new partnerships and initiatives made by Walgreens in recent years to try to get ahead of rapid changes in health care, as it competes against the likes of CVS Health and Amazon.
Walgreens has been doing well financially in recent months, as it also works to cut costs. In July, Walgreens reported a strong third quarter, partly due to better foot traffic in stores after seeing many customers vanish during the early months of COVID-19. It also saw more people in its stores seeking COVID-19 vaccines.
Before COVID-19, Walgreens implemented a number of cost-saving measures, as it worked to adapt to changing consumer habits and deal with pressures related to reimbursements for medications.
Walgreens has said it aims to slash costs by $2 billion a year by 2022. Walgreens also laid off more than 100 employees in its Deerfield office in October 2019, and has closed more than 200 U.S. stores.
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