Walgreens-backed VillageMD is exiting Indiana.
The primary care provider plans to shutter all 12 of its Village Medical practices across the state, effective Jan. 19, a VillageMD spokesperson confirmed Friday. Some of the locations are co-located with Walgreens stores, but the stores are not closing, the spokesperson said.
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The closures stem from Walgreens' larger cost-cutting plan announced in October that involves closing 60 VillageMD-operated clinics in five markets. Earlier this month, VillageMD said 10 clinics in the Jacksonville, Florida, area will close in January. Walgreens is seeking $1 billion in savings, most of which will come from pharmacy operations and scaling back capital projects by about $600 million.
"We are committed to helping our teams during this transition and we are working diligently to care for our patients during this transition. This includes offering care to them during this transition and the resources they need to access care and their medical records," the spokesperson said.
Walgreens invested $5.2 billion to take a majority stake in VillageMD in 2021. The retail pharmacy chain had big plans for VillageMD, setting a goal to open 1,000 clinics by 2027. It quickly rolled out more than 200 clinics co-located with Walgreens stores. VillageMD also purchased Summit Health-CityMD in an $8.9 billion deal that closed about a year ago.
However, Walgreens' healthcare services division, which includes specialty pharmacy company Shields Health Solutions and home care company CareCentrix, has not delivered on promised returns. The division reported $1.73 billion in operating losses in fiscal 2023.
Former CEO Rosalind Brewer, a proponent of the healthcare services strategy, stepped down in September. The next month, Walgreens named former Cigna executive Tim Wentworth as its new CEO.
Company executives say they remain committed to the healthcare services strategy, but will be taking a more measured approach moving forward.