Late last week, retail giant Walmart announced its plan to acquire national telemedicine provider MeMD, for an undisclosed sum. According to Dr. Cheryl Pegus, Walmart’s executive vice president for health, the acquisition “complements our brick-and-mortar Walmart Health locations”, allowing the company to “expand access and reach consumers where they are”.
MeMD, founded in 2010, provides primary care and mental health services to five million patients nationally. The acquisition extends Walmart’s health delivery capabilities beyond the handful of in-store and store-adjacent clinics it runs, and follows the launch of its own Medicare Advantage-focused broker business, and partnership with Medicare Advantage start-up Clover Health to offer a co-branded insurance product.
Walmart has been climbing the healthcare learning curve for several years, building on its sizeable retail pharmacy business, and seems to have hit on a successful formula in its latest in-person clinic model, which includes primary care, behavioral health, vision, and dental services. The retailer plans to add 22 new clinic locations by the end of this year, and its new telemedicine offering will allow it to expand its virtual reach even further.
The MeMD acquisition also represents a new front in Walmart’s head-to-head competition with Amazon, which launched its own national telemedicine service earlier this year. That service, Amazon Care, is targeted at the employer market, and right on cue, Amazon announced its first customer sale last week—to Precor, a fitness equipment company.
Both retail giants are slowly circling the $3.6T healthcare industry, targeting inefficiencies by deploying their expertise in convenience and consumer engagement. Incumbents beware.
- Uber Health is partnering with e-prescription startup ScriptDrop in a deal expanding the ride-hailing giant’s prescription delivery footprint from a few cities to dozens of U.S. states.
- Uber first forayed into medication delivery in several metro areas in August through a deal with digital delivery marketplace NimbleRx, as the pandemic caused a surge in patient demand for the service.
- With this latest deal, Uber’s hundreds of thousands of drivers will be accessible to pharmacies using ScriptDrop in 37 states across the U.S. ScriptDrop, a third-party tech platform connecting patients and pharmacies with couriers nationwide, will pay Uber for the cost of each delivery.
Uber’s main thrust in the healthcare sector is non-emergency medical transportation, and it has netted some 1,500 partners, including major health systems and payers, since launching in the space three years ago.
But the San Francisco-based company is also hoping the crowded but lucrative at-home prescription drug delivery market will be profitable, following mounting losses last year as the coronavirus pandemic pummeled ride-hailing companies.
Growth in Uber’s delivery business has outpaced plummeting ridesharing revenue during COVID-19. In fourth quarter earnings released February, Uber’s gross bookings in its mobility business were down 50% year over year, while gross bookings in its delivery segment were up 130%.
This latest deal suggests Uber is doubling down on delivery, banking that demand for at-home drug delivery remains high beyond COVID-19.
ScriptDrop integrates with a pharmacy’s software system to provide same-day shipping medication delivery options, and also has a consumer-facing portal for drop-offs. As of today, Uber is integrated with ScriptDrop via an application programming interface, and will become the default option for select pharmacies depending on location and driver availability, the companies said.
ScriptDrop doesn’t share the exact number of U.S. pharmacies working with its platform, but a spokesperson told Healthcare Dive they partner with thousands. ScriptDrop clients include prominent pharmacies like Albertsons, Kmart and Safeway; pharmacy systems such as PDX and a number of courier companies, health systems and insurers.
The partnership is operational in 37 states as of today, including California, Florida, New York and Texas. Uber and ScriptDrop have additional plans for near-term expansion, in some cases in new states in the next couple of weeks, the spokesperson said.
Uber first launched consumer-facing prescription delivery in several U.S. cities through the Uber Eats app, in the partnership with NimbleRx. That’s grown from a pilot in Seattle and Dallas to cities including New York, Miami, Austin and Houston, with more metro areas to come, according to Uber.
Prescription drug delivery companies have reported skyrocketing utilization during COVID-19. Columbus, Ohio-based ScriptDrop has said delivery volume jumped 363% from February to April last year, while revenue tripled between October 2019 and October 2020. The startup announced a $15 million funding round in October to drive growth, bringing its total funding to $27 million since launching in 2017.
Partially as a result of COVID-19 tailwinds, the prescription tech sector, which includes e-prescription vendors like NimbleRx and ScriptDrop, is expected to grow at a compound annual growth rate of 16%, the quickest of the enterprise health and wellness segments, according to a February report from Pitchbook.
Despite consumer demand for at-home prescription delivery, it’s a crowded market. Most major pharmacies, including CVS Health and Walgreens, have hustled to build out their delivery networks in the past few years, facing potential disruption from outside entrants, notably Amazon.
COVID-19 accelerated a number of trends already brewing in the healthcare industry, and that’s not likely to change this year, according to a new report from CVS Health.
The healthcare giant released its annual Health Trends Report on Tuesday, and the analysis projects several industry trends that are likely to define 2021 in healthcare, ranging from technology to behavioral health to affordability.
“We are facing a challenging time, but also one of great hope and promise,” CVS CEO Karen Lynch said in the report. “As the pandemic eventually passes, its lessons will serve to make our health system more agile and more responsive to the needs of consumers.”
Here’s a look at four of CVS’ predictions:
1. A looming mental health crisis
Behavioral health needs were a significant challenge in healthcare prior to COVID-19, but the number of people reporting declining mental health jumped under the pandemic.
Cara McNulty, president of Aetna Behavioral Health, said in a video attached to the report that it will be critical to “continue the conversation around mental health and well-being” as we emerge from the pandemic and to reduce stigma so people who need help seek it out.
“We’re normalizing that it’s important to take care of our mental well-being,” she said.
Data released in December by GoodRx found that prescription fills for depression and anxiety medications hit an all-time high in 2020. GoodRx researchers polled 1,000 people with behavioral health conditions on how they were navigating the pandemic, and 63% said their depression and/or anxiety symptoms worsened.
McNulty said symptoms to look for when assessing whether someone is struggling with declining mental health include whether they’re withdrawn or agitated or if there’s a notable difference in their self-care routine.
2. Pharmacists take center stage
CVS dubbed 2021 “the year of the pharmacist” in its report.
The company expects pharmacists to be a key player in a number of areas, especially in vaccine distribution as that process inches toward broader access. They also offer a key touchpoint to counsel patients about their care and direct them to appropriate services, CVS said.
CVS executives said in the report that they see a significant opportunity for pharmacists to have a positive impact on the social determinants of health.
“We’ve found people are not only open and willing to share social needs with their pharmacists but in many cases, they listen to and act on the advice and recommendations of pharmacists,” Peter Simmons, vice president of transformation, pharmacy delivery and innovation at CVS Health, said in the report.
3. Finding ways to mitigate the cost of high-price therapies
Revolutionary drugs and therapies are coming to market with eye-popping price tags; it’s not uncommon to see new pharmaceuticals priced at $1 million or more. For pharmacy benefit managers, this poses a major cost challenge.
To address those prices, CVS expects value-based contracting to take off in a big way. And drugmakers are comfortable with the idea, according to the report. Novartis, for example, is offering insurers a five-year payment plan for its $2 million gene therapy Zolgensma, with refunds available if the drug doesn’t achieve desired results.
CVS said the potential for these therapies is clear, but many payers want to see some type of results before they fork over hundreds of thousands.
“Though the drug may promise to cure these patients for life, these are early days in their use,” said Joanne Armstrong, M.D., enterprise head of women’s health and genomics at CVS Health, in the report. “What we’re saying is, show us the clinical value proposition first.”
CVS said it’s also offering a stop-loss program for gene therapy to self-funded employers contracted with Aetna and/or Caremark to assist them in capping the expenses associated with these drugs.
4. Getting into the community to address diabetes
Diabetes risk is higher among vulnerable populations, such as Black patients, and addressing it will require local and community-based solutions, CVS executives said in the report. Groups at the highest risk for the disease are less likely to live in areas with easy access to a supermarket, for example, which boosts their risk of unhealthy eating, according to the report.
The two key hurdles to addressing this issue are access and affordability. The rise in retail clinics and ambulatory care centers can get at the access issue, as they can offer a way to better meet patients where they are.
At CVS’ MinuteClinics, patients can walk in and receive a number of services to assist them in managing diabetes, including screenings, consultations with providers and connections to diabetes educators who can assist with lifestyle changes.
Retail locations can also assist with medication costs, creating a one-stop-shop experience that’s easier for many diabetes patients to slot into their daily lives, CVS said.
“Diabetes is a case study in how a more connected experience can translate to simpler, affordable and more accessible care for underserved communities,” said Dan Finke, executive vice president of CVS Health and president of its healthcare benefits division.
The CDC selected Walmart and Sam’s Club to help administer COVID-19 vaccines in communities across the United States.
Why it’s important: With 5,000+ pharmacy locations, the company can administer the vaccine in hard-to-reach parts of the country.
Neighborhoods in cities like Chicago are rapidly becoming places where people can’t fill medical prescriptions locally because their drugstores have shuttered or don’t accept Medicaid.
Why it matters: The pandemic has accelerated the growth of “pharmacy deserts” as unprofitable and less-profitable stores have closed. It’s a worrisome trend for the urban poor, who are less likely to try online pharmacies and more likely to let their drug regimens lapse when they can’t get medication locally.
Driving the news: Effective Dec. 1, Medicaid patients in Illinois — of which there are 400,000, per the Chicago Tribune — could no longer get their prescriptions filled at Walgreens, a prevalent chain headquartered in a Chicago suburb.
- The change came because Aetna, which provides contracts with the state of Illinois to serve Medicaid recipients, dropped Walgreens as a provider. CVS — a top Walgreens rival — owns Aetna as well as the pharmacy benefits manager CVS Caremark.
- CVS “has no pharmacies in five key West Side neighborhoods,” per the Tribune.
- Illinois state Rep. La Shawn Ford called Aetna’s decision “pathetic” and told the Tribune, “It’s an attack not just on Black people, but on those that are struggling during the pandemic.”
The backstory: Researcher Dima Qato coined the term “pharmacy desert” in a 2014 article that found there were far fewer pharmacies in Chicago’s Black neighborhoods than in white and mixed neighborhoods.
- Medicaid policies like the one in Illinois “are all over the country, where Medicaid dictates where and where you can go fill your medication,” Qato tells Axios. “And that leads to certain pharmacies having less patients in them, which leads to less profits, which leads to closures.”
- Qato — who recently took a post as a professor at the University of Southern California, and is in the process of moving from Chicago — said that the new Medicaid policy in Illinois is generating “a lot of outrage in the community right now.”
- Per Qato’s definition, people live in a “pharmacy desert” if they can’t fill a prescription within a half-a-mile of their homes (for low-income people without cars), and a mile for others.
- “We’ve estimated it for Chicago at a third of the city’s population, with substantial difference by racial composition,” Qato says.
Between the lines: Because pharmacies get the lowest reimbursements for filling Medicaid prescriptions, they’re more likely to close stores in low-income neighborhoods and open them in wealthy ones, notes Antonio Ciaccia, chief strategy officer of 3 Axis Advisors, a consultancy focused on the drug supply chain.
- “We’re seeing a general retreat from impoverished areas,” said Ciaccia, who serves as an adviser to the American Pharmacy Association.
Of note: Studies draw a direct line between pharmacy closures and people stopping their vital medications — with terrible health outcomes.
- Adults over 50 were more likely to drop their cardiovascular pills after their local drug store closed, according to a study published in the Journal of the American Medical Association in 2019 (of which Qato is the lead author).
- Benjy Renton, the Middlebury College senior who has been closely tracking the COVID-19 outbreak, noted on Twitter that pharmacy deserts could hold back the administration of vaccines.
What’s next: While “food deserts,” where inner-city residents lack access to fresh and healthy groceries, are a bigger problem in places like New York City, pharmacy access is a growing concern. The number of drugstores has declined 20% in NYC since 2016, according to Jonathan Bowles, executive director of the Center for an Urban Future.
- “I for one will miss the 70 Duane Reades that closed this year,” was the headline of an an article that New York Magazine’s “Curbed” ran on Dec. 30. (Duane Reade is owned by Walgreens.)