Walgreens' VIllageMD exits Florida market, shuttering remaining primary care clinics

Walgreens is closing its remaining VillageMD primary care clinics in Florida. 

The company is exiting the Florida market, a VillageMD spokesperson confirmed to Fierce Helathcare. About 40 clinics in the Tampa and Orlando areas will close March 15. 

The announcement does not come as a total surprise, as Walgreens first disclosed its plans to close 60 underperforming VillageMD clinics and exit five markets last fall.

“To continue to scale our care delivery services and value-based care model, we assess and evaluate our progress on an ongoing basis and refine our approach as we grow, similar to most growth-oriented companies,” a spokesperson told Fierce Healthcare in an email. “Strategically, we are focused on geographic density in markets and locations where we can serve patients to our standards of quality care.”

To support patients through the transition, VillageMD will give patients resources on where else to seek care and how to access their medical records, the spokesperson added. 

The Florida Association of Community Health Centers represents 54 health centers in all 67 counties in Florida at more than 800 locations. The clinics are available to all Floridians, regardless of their ability to pay, a spokesperson told Fierce Healthcare in an email. Locations can be found here.

“This allows many of the most vulnerable patient populations to find an affordable healthcare home that provides several services including primary care, dental, and behavioral health for adults and children,” the spokesperson said. 

For the year, its fiscal 2023, Walgreens posted revenues of $139 billion, up 5% year over year, and a loss of $3.08 billion, or $3.57 per share. Walgreens is undertaking efforts to increase cash flow and free up capital to grow its pharmacy and healthcare businesses. It is on track to cut $1 billion in expenses in 2024.

It previously closed 27 underperforming VillageMD clinics as part of a plan to close 60 clinics this year.

The retailer is also reportedly exploring a potential sale of its specialty pharmacy business Shields Health Solutions, in which it acquired a majority stake less than three years ago. Shields offers medications with unique handling, administration and monitoring requirements. The sale could be valued at more than $4 billion.

Walgreens has shaken up its leadership over the past year. Its CEO stepped down last September, with Ginger Graham filling in as interim CEO. Then, in October, former Express Scripts CEO Tim Wentworth came in to take the helm. During the company’s fourth-quarter earnings call, Graham said Walgreens was focused on “scrutinizing every penny of spend that does not directly benefit the customer,” among other priorities. 

At the same time, John Driscoll, president of the U.S. healthcare business at Walgreens Boots Alliance, had said VillageMD was slated to be among the most “meaningful drivers of growth” in fiscal 2024. The best way to enhance VillageMD growth and value is by focusing on “increased density in our highest opportunity markets and expanding integration of our digital assets,” he said. Driscoll stepped down as president this month, moving into an advisory role. He was replaced by former CVS and Solera Health executive Mary Langowski.

Walgreens originally invested in VillageMD in 2020. Other healthcare segments the company owns include primary, specialty and urgent care provider Summit Health/CityMD, post-acute and home care provider CareCentrix and Walgreens Health.