Walgreens sees benefit from CVS exiting clinical trial business

Walgreens (WBA) is already benefiting from CVS (CVS) winding down its efforts to conduct clinical trials in its retail locations.

CVS's trial strategy began during the pandemic when there was a need to have more diverse participants in trials. Walgreens and Walmart (WMT) also announced similar efforts. Then, last year, the FDA issued a new mandate for clinical trials to focus on diversity, which included pharmacies as potential partner sites — which is why CVS's move to pull out of the space is surprising.

CVS confirmed to Yahoo Finance in a statement Monday that it would be closing this line of business by 2024. "We continually evaluate our portfolio of assets to ensure they are aligned with our long-term strategic priorities. As a result, we’re winding down our Clinical Trial Services business in a phased way, with a full exit expected by December 31, 2024," CVS said in a statement.

In response, Walgreens reiterated its commitment to remain in the space and that clinical trials are part of the company's long-term strategy.

Ramita Tandon, Walgreens' chief clinical trials officer, told Yahoo Finance as much in an interview Monday.

"We are full steam ahead as we continue to support many of our manufacturers that have come into the ecosystem since June," Tandon said, referring to when it launched its clinical trial segment.

"We're very focused on what we're doing at Walgreens because its part of the broader health care mission and journey that we're on," she added.

In addition, Tandon said, Walgreens believes that the company has staffed its line of business with experts in the field, rather than just relying on pharmacists, to give it a more robust approach.

"It's not easy to be able to execute clinical trials as a provider organization. The staff that we have in place, the leadership...have either worked at a site or worked in different entities that allowed us to understand and appreciate those complexities and those challenges," Tandon said of different styles of trial sites. That's where the retailers came into the picture.

CVS will shut down its clinical trial business after a two-year run to focus on its "core business"

What are Walmart and Walgreens thinking, who both launched a clinical trials business last year?

Seeing CVS's clinical trials vertical go down after 2 years is quite ominous pic.twitter.com/udSIXE45yl

— Jared Dashevsky, MD, MEng 💌 (@jareddashevsky) May 15, 2023

Clinical trials are often conducted at locations that are academic centers or contracted clinical sites, and tend to skew more urban, according to researchers. That leaves a large swath of the country's population out of the loop. During the pandemic, some trials began checking in on patients virtually, when possible, opening up the possibility of different styles of trial sites. That's where the retailers come into the picture.

The National Institutes of Health has also emphasized the need to have more diverse patients participate in clinical trials since the start of the pandemic. At the time, the lack of diversity in trials and access issues were in full focus.

"After reviewing 20 years of data shared through clinical research trials, researchers found that less than half of studies included information about the race or ethnicity of participants," the agency said in a report last year.

By doing so, it could help clinicians better understand who benefits more from new drugs and therapies.

"This disparity contributes to biased medical evidence and excludes minorities from the benefits of clinical trial participation," the study said.

The agency's efforts, along with the new FDA mandate, provides more flexibility for clinical trials to include hybrid approaches that will help diversify the patient population, Tandon said.

Follow Anjalee on Twitter @AnjKhem

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