CVS Health and Walgreens Boots Alliance are pivoting from their normal businesses in an effort to shore up finances and outrun the challenges facing retailers and healthcare organizations nationwide.
America's two largest pharmacy chains are remodeling hundreds of stores into health-based centers, focused on providing services to treat patients with diabetes, heart disease and hypertension. The overall strategy is to make the retail pharmacies go-to treatment centers for patients managing chronic illnesses.
While CVS and Walgreens have shifted their focus to health and wellness in recent years, there is now a greater urgency to make the switch to bring consumers into their stores, according to The Wall Street Journal.
Both pharmacy chains are under tremendous pressure to counter slowing revenue attributed to several trends in the industry, including declining generic drug prices, smaller reimbursements from pharmacy benefit managers and consumers shifting to online shopping.
Those industry challenges were made clear when Walgreens reported second-quarter financial results below analysts' expectations.
On a call with investors, Walgreens CEO Stefano Pessina called the quarter "the most difficult quarter we have had since the formation of Walgreens Boots Alliance" and said that a number of trends they expected and have been preparing for "impacted us significantly more quickly" than anticipated.
CVS Health also reported grim financial results for the fourth quarter of 2018 in February, posting a net loss of $421 million.
"It's clear that the drugstores that we are used to knowing will not be the store of the future for sure, so we have to change," Mr. Pessina told The Wall Street Journal.