Axios Pro: Health Tech Deals

July 10, 2023

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Welcome back, Health Tech readers.

ICYMI: Molina Healthcare agreed to buy Bright Health's MA lives for $600 million in cash over the holiday, just three years after scooping up Brand New Day and Central Health Plan for $538 million.

1 big thing: Retailers seek to shake up clinical trials business

Illustration: Sarah Grillo/Axios

Big retailers increasingly see clinical trials as a growth opportunity, Axios' Tina Reed writes.

Why it matters: The moves by store operators including Kroger, Walgreens and Walmart could create a more diverse pool of subjects and expand access to cutting-edge treatments — but concerns include safeguards around sensitive patient data.

What they're saying: "We're trying to build the right highway into our communities to bring trials closer to where they are," Ramita Tandon, Walgreens' chief clinical trials officer, tells Reed, noting the retailer has 8-9 daily visitors.

  • Walgreen's clinical trial business, part of its $109 million U.S. Healthcare unit, has eight signed contracts with pharma companies including Prothena and Freenome for an experimental Alzheimer’s treatment and a colorectal cancer screening test, respectively.

What it looks like: Since the retailers have locations in more vulnerable neighborhoods and can eliminate barriers including transportation and time costs while leveraging existing relationships, they say they can drive more diverse participation in studies.

  • "Right now, what does a patient do? They go to and that doesn't make sense," says Jim Kirby, Kroger Health's chief commercial officer.
  • Retailers, by contrast, have existing relationships with people and say they can tell them they are eligible right at the pharmacy counter.

Yes, but: Retailers still have to invest in more capabilities, including buying the appropriate technology to capture and safely store patient information, per a recent Ernst & Young report.

  • And CVS Health recently opted to wind down its two-year-old clinical trials business to focus on core operations.

The big picture: The clinical trial market is already $50 billion market expected to grow at a yearly rate of 5.8% to top $78 billion in 2030, per Grand View Research.

  • Analysts have mixed views about retailers' forays here. While patient recruitment isn't as lucrative as other business lines, life sciences companies have cash and are looking for partnerships, Peter Bonis, chief medical officer at Wolters Kluwer Health, tells Axios.
  • "They have very deep pockets and they write checks quickly," Bonis says. "Getting the patients quickly is really important. Time is money here."

Zoom in: Retailers point to dismal past recruitment efforts in arguing the trials business is ripe for disruption — only about 5% of people in the U.S. have ever participated in a trial.

  • The FDA in February laid out a roadmap requiring any parties seeking clinical trial approval to outline plans to include more people of color.

The other side: The EY report notes the retailers' ambitions require a lot of new capabilities including remotely identifying patients, monitoring them remotely and capturing and securing their data.

State of play: Clinical trial startups are attracting VC capital on the heels of the FDA's recent guidance and more public awareness about trials' lack of diversity, Erin has written.

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