Its new deal with Microsoft speaks volumes about how Walgreens intends to win the end game for digital healthcare dominance and outdo rivals CVS Health and Amazon.com in the process.

The deal Walgreens Boots Alliance now has with Microsoft Corp. does more than represent the hook-up of a big pharmacy chain and technology company.

Rather, the deal with Microsoft speaks volumes about how Walgreens intends to win the end game for digital healthcare dominance and outdo rivals CVS Health and Amazon.com in the process.

CVS and Amazon, big companies in their own right with substantial assets already in place for retail and healthcare e-commerce, are opening the pocketbook and spending big bucks to establish more healthcare market share.

For example, in November CVS completed its nearly $70 billion acquisition of healthcare insurer Aetna. It also pledged to offer a more turnkey approach to consumer-driven healthcare that essentially turns about 10,000 CVS stores into retail and digitally driven healthcare shopping malls. In October, Amazon.com completed its acquisition of digital pharmacy PillPack.com for $775 million and announced plans to move more aggressively into the filling and delivery of prescription drugs using e-commerce as a primary tool.

Will coalition building vs. build by acquisition be “winner take all” in the end?

But Walgreens, arguably the first retail-driven healthcare company to stake a claim in the growing market for digital healthcare and web-driven patient care, is taking a different path. Instead of buying its way to a bigger market share, Walgreens is trying to partner its way. That’s a strategy Walgreens knows very well.

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The new relationship with Microsoft is a prime example. Last week Walgreens announced it would begin working with Microsoft to design new “digital health corners” for its stores, beginning with a 12-store pilot project this year. As part of the deal, Walgreens will begin using Microsoft’s Azure cloud-computing software, moving applications and data to retailers’ data centers, the companies said.

Lots of details about the new Walgreens and Microsoft alliance are still unclear, such as the amount of money and additional resources each company is bringing to the deal and what precisely each company stands to gain in the way of new sales and customers. In general, Walgreens says Microsoft will help the drugstore chain use such new technologies as artificial intelligence and the Internet of Things (IoT) to develop new preventative self-care programs and services to for chronic disease management. “WBA will pursue lifestyle management solutions in areas such as nutrition and wellness via customers’ delivery method of choice, including digital devices and digital applications or in-store expert advice,” the retailer says.

Walgreens and Microsoft also aim to use Microsoft technology to potentially bring more advanced data and analytical services to achieve more universal connectivity via electronic networking between payers, providers and consumers. In other words, Microsoft has the advanced digital and mobile healthcare technology products and services Walgreens can’t truly develop on its own, and Walgreens already has established connections—digital and physical—to consumers, healthcare systems and insurers.

As a retailer, Walgreens operates 9,560 drug stores and has a substantial digital and mobile healthcare base that generated estimated annual web sales of $1.69 billion in 2017, based on data and analysis contained in the recently released  67-page Healthcare E-Commerce Report produced by Internet Health Management and Internet Retailer, both members of the Digital Commerce 360 family of e-commerce editorial and research products. More than 50 million customers also have downloaded the Walgreens app, which allows shoppers to submit and refill prescriptions, and the drugstore chain offers online prescription orders and refills at about 8,100 locations in the U.S., the retailer says. About 200 million of the 1 billion prescription orders Walgreens processes each month are completed online.

Walgreens’s goal is to turn its substantial e-commerce base and digital drugstore business into a diversified digital healthcare services delivery company and outmaneuver CVS and Amazon in the process. That’s where the race to complete more partnerships such as the kind with Microsoft come into play.

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Walgreens is trying to build, rather than buy, its version of a digital healthcare dream team. The latest deal is with Microsoft but Walgreens has forged a series of other agreements designed to insulate it from a rapidly evolving healthcare and retail landscape. Walgreens set up a senior health clinic joint venture with insurer Humana Inc. And to ramp up its technological and e-commerce sophistication, it has inked deals with Verily Life Sciences, a unit of Google parent Alphabet Inc., and cosmetics retailer Birchbox Inc.

On the provider side, Walgreens has launched Find Care Now, a desktop application and mobile app, that lets users navigate and search for local and digital healthcare services. Its offerings in certain markets are as varied as neighborhood healthcare clinics, urgent care, telehealth, lab testing, physician second opinions and even physician house calls, and optical and hearing services, Walgreens says. With Find Care Now, consumers can go online, find providers at a participating health system, schedule and pay for a digital doctor visit or schedule an eye exam at a Walgreens store. Fees range from $55 for the eye exam to $59 for a telehealth session for non-emergency (walk-in clinic) conditions and $89 for an online visit with a behavioral therapist. What services are covered by health insurance are determined by each user’s health plan, Walgreens says.

So far, 17 healthcare systems, hospitals, laboratory testing companies and telehealth services providers are participating in Find Care Now. Health systems and hospitals include: Advocate Health Care, Chicago; Baptist Health, Jacksonville, Florida; Community Health Network, Indianapolis; Florida Hospital, Tampa; NewYork-Presbyterian Hospital in collaboration with Weill Cornell Medicine and Columbia University Irving Medical Center, New York; Piedmont Healthcare, Atlanta; Providence St. Joseph Health, including Providence Express Care in Portland, Oregon; Swedish Express Care in Seattle; SSM Health, St. Louis; and The University of Miami Health System, Miami.

Walgreens built Find Care Now based on consumer research and demand for more one-stop healthcare services, a key reason the drugstore chain’s new provider marketplace lets shoppers view cash pricing information and also have the ability to schedule visits or complete virtual consultations in some markets. “Consumers tell us they want new ways to access care,” says Walgreens vice president and director of healthcare innovation Giovanni Monti.

The conclusion for Walgreens and the race to win over the majority of digital healthcare shoppers is wholly different from the approach by Amazon and CVS.

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CVS and Amazon clearly have a “buy it and they will come” approach to digital healthcare. Walgreens’s approach is “partner and they will come.”

Will coalition building vs. build by acquisition be “winner take all” in the end? That’s up to patients and consumers to decide and they‘re still waiting to see how the game plays out.

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