Walmart has been busy. A week ago, the retail giant generated a flurry of news coverage when a rumor surfaced that the giant retailer might buy healthcare provider Humana. And then on April 3, Walmart was in the news once again when it was reported that the company was in talks to acquire PillPack, an online pharmacy that helps people manage prescriptions by packaging pills together and delivering them. By far, the bigger rumor was Humana: as The Wall Street Journal reported, the two companies have been discussing a relationship that could include a merger – which would be the largest in Walmart’s history. In any case, it is not surprising to hear that Walmart may acquire Humana, PillPack, or both.
Walmart is not only a retail giant – it’s also a major healthcare player through its network of more than 5,000 stores. I refer to Walmart stores as “container stores.” A container store operates multiple services under one roof. They bring customers back by making it easy to buy multiple products and services in one convenient location. And Walmart has placed a number of healthcare services in its stores. They include:
In addition, Walmart makes healthcare easier through its popular app, which facilitates services such as pharmacy refill.
An acquisition of PillPack, and a closer partnership with Humana (in whatever form it takes), would be a continuation of Walmart’s journey, not a departure. Walmart has plenty of reasons to eye Humana, ranging from strengthening its competitive position against Amazon to servicing the aging, and sizable Baby Boomer market (Humana is the second-largest provider of Medicare Advantage plans). As Aimee Picchi of CBS News noted, Walmart could also increase its profit margins and gain more data on its customers.
And Pillpack is attractive because the company would make Walmart a 24/7 pharmacy. As Bob Kocher, a health investor with Venrock, commented, “Walmart is trying to offer a better e-commerce experience as a retailer, as well as on the health side with its pharmacies, and it wouldn’t cost them that much to buy a company like PillPack.”
In a year when Walmart has been disappointing its shareholders, expensive deals would certainly create more flak for the company. But Walmart has resolved an obvious intent to be an active healthcare participant. The Humana and Pillpack transactions, even if they do not happen, are signs of more moves to come from the world’s retail power player.