Retail pharmacy giants have been straining under intense headwinds slamming into the industry this year — and Walgreens’ most recent earnings report is another case in point.
Facing a $3 billion loss in the fourth quarter, the company said in October that it plans to close about 1,200 lower performing stores over the next three years, citing changing consumer habits, rising competition from chains like Walmart and ongoing battles with pharmacy benefit managers over reimbursement as its chief challenges. The pharmacy chain operates nearly 9,000 stores in the U.S. today.
As Walgreens looks to regain its footing, the company plans to reorient a focus on its “legacy strength as a retail pharmacy-led company,” CEO Tim Wentworth said on an earnings call.
What will the revamp mean for its ambitions in the clinical trials space?
Launched in 2022, Walgreens’ clinical trials business falls under its healthcare segment. In the last quarter, that segment saw a healthy 7% bump in sales over the previous year, which was one bright spot company executives pointed to on the October earnings call. But overall company operating losses also topped $14 billion in fiscal year 2024, and Walgreens has indicated it could sell one of its key segments — the primary care business VillageMD.
Still, Ramita Tandon, Walgreens’ chief clinical trials officer, said in an interview that the company’s clinical trials plans remain full steam ahead.
“There’s been no impact to the business,” Tandon said, pointing out that the upcoming store closures will not affect Walgreens’ 20 clinical trials centers.
“I built the business to tackle two issues — the lack of representation and the lack of trial accessibility."
Ramita Tandon
Chief clinical trials officer, Walgreens
Overall, Walgreens’ clinical trials services are interwoven with day-to-day drugstore operations, which keep them aligned with wider plans to refocus on its legacy as a pharmacy.
“We are in lock step with the wider business model,” Tandon said.
Walgreens’ pharmacy infrastructure and multiple partnerships in the clinical trials space have leveraged its unique ability to capture patient data and recruit diverse populations.
“When a patient picks up a prescription, we have built the clinical trial activity into the system so that pharmacists get flagged that they could be eligible for a trial,” Tandon said, explaining the strategies Walgreens uses to drive recruitment.
Boehringer Ingelheim announced in May that the German pharma is teaming up with Walgreens to recruit and run a phase 3 study for an obesity and diabetes candidate at its clinical trial centers.
More recently, Walgreens announced a partnership with the Biomedical Advanced Research and Development Authority aimed at bolstering decentralized clinical trial models that could be used during a health crisis.
“I built the business to tackle two issues — the lack of representation and the lack of trial accessibility,” Tandon said. “So we look for public and private partnerships that help us unlock those issues.”
So far, Walgreens’ clinical trial recruitment efforts have reached more than five million patients, Tandon said, and the business has stayed buoyant while other pharmacy giants have dropped out of the space.
CVS, which has closed hundreds of stores in the last few years, shuttered its clinical trials business in 2023 after just two years.
Tandon said she recognizes Walgreens’ clinical trials business is not a “nonprofit,” and that each partnership has to drive revenue to the organization. Going forward, “ongoing partnerships with pharma are going to be crucial” while the company considers bringing new types of companies into the fold, Tandon said.
“As others potentially come into the ecosystem, like CROs, we evaluate each possibility on a case-by-case basis to look at trial objectives and make sure it drives value for both the partner and Walgreens,” Tandon said.
