Walmart, CVS and Walgreens faced major headwinds in 2024 as their efforts to push into primary care faltered.
Here are 10 notes on major moves and updates signaling the failure of primary care:
Walmart
1. In April, Walmart Health announced it would close all 51 of its health centers across five states. The retailer also revealed plans to shut down its Walmart Health Virtual Care services.
2. Following the announcement, Walmart conducted layoffs at its corporate headquarters in Phoenix, letting go of 74 employees tied to its Walmart Health Virtual Care operations.
CVS Health
3. In 2023, CVS Health spent $10.6 billion to acquire primary care company Oak Street Health, which has since been a "money losing asset," according to The Wall Street Journal. Now, according to the Journal, shares in the company have fallen 24% in 2024, and CVS has cut its earnings guidance multiple times during the year.
4. The cuts are mainly driven by rising costs in Aetna's Medicare Advantage business, and the company anticipates it could lose up to 10% of its MA membership in 2025.
5. At the end of September, CVS announced plans to lay off 2,900 employees, primarily in corporate roles. In a federal worker adjustment and retraining notification filed Oct. 6, CVS Health said it will lay off 416 employees at Aetna's headquarters in Hartford, Conn. CVS is also laying off 632 employees in its corporate headquarters in Woonsocket, R.I., according to a separate WARN notice.
6. CVS Health's board of directors have retained bankers to review the company, possibly leading to a split, according to the Journal.
The management team and board of directors said they are examining how to create more shareholder value and drive improved financial performance. A company breakup is one option on the table, according to the Journal.
Walgreens
7. Walgreens Boots Alliance is reportedly considering selling itself to private equity firm Sycamore Partners and becoming private, The Wall Street Journal reported Dec. 10.
8. This decision comes amid clinic closures across multiple states. In October, Walgreens announced in its fiscal fourth-quarter earnings report that it will close 1,200 locations over the next three years. The closures include 500 in 2025, which should immediately support adjusted earnings and free cash flow. The closures also encompass 300 stores slated for shutdown under a previous cost-cutting initiative.
9. Financially, Walgreens posted a $978 million operating loss in Q4 2024 — a 117% increase year-over-year. Net losses jumped to $3 billion, compared to $180 million the year prior
10. In 2021, the company acquired a majority stake in VillageMD through a $5.2 billion deal, but it is now reconsidering that strategy — mirroring other large chains' struggle to break into primary care. According to an Aug. 7 Securities and Exchange Commission filing, Walgreens is evaluating options for VillageMD, including a potential sale of all or part of its stake, as well as restructuring alternatives.