Rebecca Pifer@RebeccaMPifer June 16, 2020
Dive Brief:
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Walmart has acquired the technology platform of CareZone, a
venture-backed startup that develops apps to help people manage medications and
chronic illnesses.
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CareZone, founded in 2012, has also built technology allowing
users to scan prescription drug labels and insurance cards to check what's
covered by their health plan, organize at at-home drug delivery and share the
information with medical teams. Walmart will take possession of those
technologies, though CareZone will retain its pharmacy business and remain a
separate company.
·
Financial terms of the deal were not disclosed, but CNBC, which
broke the news, pegged the deal at $200 million. Walmart stock was up slightly
in early Tuesday morning trading.
Dive Insight:
Digital health has seen expanding
opportunities amid the COVID-19 pandemic as consumers look for ways to see
their doctor, get their medications and monitor symptoms at home. But even
before the novel coronavirus, the sector saw a surge of interest from
technology and retail giants.
With the purchase of CareZone's
technology, patents and intellectual property, Walmart is once again building
up its digital health capabilities.
Roughly 3.5 million people use
CareZone's apps, per CNBC, and 25 to 30 product and development employees from
the San Francisco-based firm will join Walmart.
Bentonville, Arkansas-based
Walmart is not purchasing CareZone's pharmacy business, which sorts consumers
medications into packs and delivers them via mail. The pharmacy, which manages
about 15 million medications, is currently embroiled in litigation after
Cigna-owned pharmacy benefit manager Express Scripts booted it from its network
in 2018 over a contract dispute.
Though Walmart isn't adding the
pharmacy, the massive retailer has been interested in moving deeper into the
$500 billion prescription drug space. It tried to snap up online pharmacy
PillPack in 2018, but was outbid by rival
e-commerce giant Amazon.
In a press release on
the buy, the chain said a significant chunk of its 160 million weekly shoppers
reported delaying medical care.
Walmart currently sells a list of
medicines for $4 or less through its generic prescription program and recently
opened its first Health Center in
its Dallas, Georgia, with services like dental, mental and health counseling,
X-rays and audiology.
Recent Walmart initiatives aimed
at lowering healthcare costs include lists of cost-effective "featured providers"
and its Center for Excellence network,
which looks to reduce unnecessary joint surgeries.
CareZone is backed by a
smattering of high-profile investors including Salesforce CEO Marc Benioff, and
has scooped up $168 million in funding over three rounds.
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