WHEN: Today, Wednesday, March 30th, 2022
WHERE: CNBC’s “Healthy Returns Summit: Reality, Recovery and Opportunity”
Following is the unofficial transcript of a CNBC interview with Walgreens Boots Alliance CEO Rosalind Brewer and CNBC’s Reporter Bertha Coombs during CNBC’s “Healthy Returns Summit: Reality, Recovery and Opportunity” today, Wednesday, March 30th.
All references must be sourced to CNBC’s Healthy Returns Summit.
BERTHA COOMBS: Rosalind Brewer, thank you so much for joining us for “Healthy Returns.” We are sitting in the middle of one of your brand-new fulfillment facilities in Dallas and it occurs to me, you know, you came to the helm of Walgreens a year ago in the middle of the pandemic, jumping into the deep end of the pool in healthcare and this is one of the new initiatives that you’ve done. Can you talk about what it has been like this past year, dealing with the healthcare crisis and at same time trying to move this company in a whole new direction?
ROSALIND BREWER: Well, first of all, Bertha, thank you for being here with me one year later from the date of my start, and so much has happened in this business and in the healthcare environment. You know, I jumped in the middle of the crisis actually about 30 days before the administration of all of the vaccines across the nation and what was so important to us is that we had to be almost first responders, right, all of our pharmacists and technicians became frontline workers overnight. But what was so important to us was to do something very critical and that was to get that scheduler system up, which was technology behind everything we had to do. So that was our first start was to make sure that we were going to be able to deliver these things. People could register online. So we went digital right away. But it made us take a step back and look at all of our processes as we were having to operate at such high speed, such, you know, unique labor hours and in such environments like mobile delivery of vaccination, so it was just the start of us thinking about so what more should we be doing in our processes? So we’re sitting here today in the third of our fulfillment centers. We’ll have 22 of these by the end of 2024. And also, what’s happening behind even outside of this work is we’re automating the inventory system and we’re doing all of this work so that the pharmacist has an easier job, so they can get back to being front and center, building a relationship with that patient and interacting the way they were trained, the work that they love to do, but automation like this will facilitate those relationships.
COOMBS: You know, it’s interesting because the pandemic in some ways may have been a silver lining. A lot of the drugstore chains were really in an existential crisis before that, trying to make themselves relevant.
COOMBS: Now, on top of having been through the last year the go to place for people to get healthcare advice, get their vaccines, get their testing, now you were adding in the VillageMD medical clinics, which you hope to scale—
COOMBS: 200 a year—
COOMBS: Over the next five years. On top of that, you’ve added also a large stake in CareCentrix, which is post-acute care and home care and that is where you see the real crux of the business for Walgreens along with the pharmacists being part of that team. How is that going to work?
BREWER: Sure. So you’re exactly right. We learned so much during this timeframe and we made some very significant investments just in October to facilitate the new way people want to care for themselves. Part of that comes from what we learned from our pharmacists, our pharmacists are absolutely front and center and the first touch point at many times with customers and patients and that has grown through this, through the pandemic. But also, when we think about how people want to care for themselves, they want to understand their care. They want to be able to see it in real life on a digital device. They want to be able to interact both from a digital perspective but also a human perspective, and they want local. They want to be nearby. They want access to healthcare. There’s another thing that we learned during the pandemic was the inequities of delivering healthcare in certain geographies. And so, from the vaccines that we delivered, we know that we did at least 30% of our vaccinations were given in medically underserved communities. And so, when we think about our 9,100 stores across the United States, we know we’re within five miles of every household, 75% of the households in the US, and then we also know that when it’s time for someone to care for via a caretaker or at risk themselves, they want that personal consultation and that’s what our pharmacists have done. But now we want to see that go full circle. So, adding VillageMD clinics which are primary care physicians in the facilities, and then what happens with CareCentrix, you know, it is post-acute care. It’s once you’ve been diagnosed and you’re at home, and there has to be that next level of care and so connecting that with our physical stores is absolutely an ecosystem that all communities need right now for access to healthcare.
COOMBS: You know, in a lot of retail, they often talk about the customer as her, as the woman.
COOMBS: And I’ve known in some of your presentations, you talked about also really making this a center for caregivers so if I’m a mom and I’ve got kids who I’ve got to work with and I have a child who has asthma and I have to monitor that and I might have a parent who also has needs to monitor as well as my own, how are you going to be able to make this be a team effort and not just someplace that she goes every now and then?
BREWER: Absolutely. So, first of all, the digital technology that we’re building, the caregiver has access and it connects to the patient. And so, if you’re a mom, many times if you’re a mom or a partner in certain situations, you don’t have approval to have access but now the digital tools will tie you together, which is fantastic.
COOMBS: So you’ll actually have a personal, a health record that someone will be able to access?
BREWER: Absolutely. The apps that we’re building right now will take our pharmacy information, along with EMR records, along with maybe what’s generated in our VillageMD clinics and brings all of that information together. So if you’re caring for your mom, Bertha, you’ll have her information. She will give you access through the app. And so then you can monitor on her behalf and if she ever becomes incapacitated and you really have to take care and manage, you look, you can see the history when a physician might ask you, well, what was going on two years ago? You’ll be able to see that information.
COOMBS: Is that something that you’re able to do now in the health corners and the Walmart health centers or is that something that’s coming down the line?
COOMBS: It’s something that people have been talking about for over a decade.
COOMBS: And I can tell you as a former caregiver, it just doesn’t happen.
BREWER: Right, it doesn’t happen. Myself included, same situation. I will tell you, we’re in the first phase of that and so you’ll see more and more come from a digital and application process from us. But when you mention health corners, think of health corners coming into 3,000 of our stores and that person acts as much as a social worker as they are a pharmacist or a registered nurse so you could come in and get anything from a chronic care capability of saying what’s my A1C today? Am I doing better after I’m taking meds? Should I be getting an adjustment in my, in my medications, or I actually need help going to see a specialist and can you recommend or even help me get transportation to the next location? So those 3,000 health corners combined with our 1,000 VillageMDs and our 9,000 pharmacists is a way to think about our new ecosystem as we go forward tied from technology all together.
COOMBS: You are not the only ones who are trying to create this new ecosystem and we are in a moment of a real labor crunch. This is a real people centered approach to try to help consumers. How are you going to meet that challenge to really be able to staff this, this new vision?
BREWER: Yes, you know, I will admit to you that staffing has been difficult, but what I think we’re seeing is how much people value having been a part of the Walgreens family for so long. Just in the last six months, we’ve invested almost a billion dollars in increased labor, and that is engaging our pharm techs, engaging our pharmacists, recognizing the important work that they’re doing. There is a very important part of what we’re also doing for our pharmacists and that is trying to get them to the point to be viewed as provider status and what that means is to work with legislation to say that these individuals can also test and treat so imagine coming into a Walgreens and you test positive for COVID. The next phase is to deliver anti-virals so instead of in, you know, and that’s time limited. So we’ve been working with the team at Pfizer to say listen, we want pharmacists to be able to test and treat, you’re testing positive, you can administer the anti-viral and begin to treat right away. It reduces costs, it reduces time, and it calms the, you know, takes the anxiety out of it all and it doesn’t just stop with just our COVID testing. It includes think about strep throat or if your child comes in with an ear infection to be able to test and treat. There are some states that already allow that but what we would love to see for our pharmacists that have worked so hard not only at Walgreens but across the country to be able to be valued as a provider. And so, we’ve been working I was just in DC the last two days of this week and we’ve been having conversations with legislators to get their support and so far, it’s going well but I’d love to see that pass for our pharmacists. They have deserved it. They’ve worked hard and this is the professional that they are.
COOMBS: One of the things that that we’ve seen is a lot of vertical integration and that’s what you’re doing. You’re bringing in the primary care physicians at a time when that is where people see value-based care going.
COOMBS: But what you don’t have beyond your Medicare (Part D) plans is you’re not a payer.
COOMBS: Is that, in this environment, is that an asset or is that a detriment?
BREWER: You know, at this moment, it is an asset for us because I look at VillageMD and VillageMD is not restricted. If you walk in there, we take every insurance that you can think of. And so, we’re not trying to push everyone through one insurance plan, come in as you are with the insurance you have and actually if you’re uninsured, and so we think that it is in our favor right now the way we want to deliver care, we know that the communities we want to serve have a variety of insurance, and some are uninsured. And so, it’s important for us to have a payer agnostic position at this point and for us, what vertical looks like for us is to be able to provide a menu of services for our patients and our customers.
COOMBS: And you talked about health equity and particularly in rural areas. We know that there are people who have to travel sometimes as much as an hour to be able to get to a provider. Are you going to focus on rolling out some of these more built out health centers?
COOMBS: That’s essentially what you are, health centers—
BREWER: Absolutely. Absolutely.
COOMBS: In those areas and where are some of the areas you’re really going to target.
BREWER: So actually 50% of our VillageMD centers will be in medically underserved communities. And so that’s our intent. That was that was one of the for me personally, that was an interesting factor to increase our investment in the company because our missions are so aligned. And so the areas that we’re, you know, we’re in Arizona, we’re in Kentucky, we’re in those places, Indiana, we’re in small communities that really need, you know, access to health care, and they don’t have to drive and they’re, it’s almost like a concierge service. You know, they’re connected, it’s a 3,000 square foot unit inside a 14,000 square foot building, connected by one door and you’ll walk right to your pharmacist and then imagine being able to pick up a few grocery goods in the front of the building so, you know, you feel like it’s a one stop service for individuals that are in rural populations and don’t have access to healthcare, either financially or by physical location.
COOMBS: Can you do it in an urban footprint because many of your stores in cities are much smaller?
BREWER: Yes, yes, we can do, we actually we have some in urban footprints already and they’re doing quite well. And so, it’s a two-physician service, eight exam rooms. They’re beautiful locations.
COOMBS: I have to ask you, because obviously you’re still a retailer.
COOMBS: But a health retailer. You’re talking about Walgreens Health.
COOMBS: Can Walgreens Health continue to sell cigarettes?
BREWER: You know, that is one of those things that I am personally looking at. I think it is something that you’ll hear us talk about and make some announcements about in short order.
COOMBS: It is one of those things that there’s some shareholders have been asking—
COOMBS: For a while.
BREWER: I hear them.
BREWER: Loud and clear.
COOMBS: As we close out. where do you see things a year from now? They’ve evolved so quickly—
BREWER: Yes. Yes.
COOMBS: Over this last year. Where do you see this Walgreens Health footprint a year from now?
BREWER: You know, I look at this footprint and I think about the consumerization that happened in retail eight to 10 years ago, where digital became the underpinning of the way all of us shop and I think a year from now, you’ll see us move closer to the consumerization of healthcare. We’ll have access to our data as patients, we’ll be able to make decisions about our health, people are so much more health conscious since the pandemic. We’ll be able to say I want to get my MRI at this location versus that location because it’s going to save me and the insurance plan money if I can decide where I want to go and save money. And so I want to make sure that a year from now, we’re putting our customers and our patients in the driver’s seat, and I think we’re going to see that as we consumerize past these cost savings that you see here in this building on to the consumer and the patient. And I think in a year from now, we’ll be really pleased.
COOMBS: Rosalind Brewer, it’s been wonderful talking to you, and I hope that we can check back before the next year is out. Thank you so much for joining us.
BREWER: Thank you. Thank you very much.