Clinical trials and tribulations: What does CVS’ exit mean for other retailers and sponsors?

On Sunday, CVS announced plans to sunset its clinical trials business—which it launched in 2021—by the end of next year. The retail giant appears to be pivoting its focus to supercharge growth of its budding value-based care delivery platform. A couple weeks ago, CVS completed the $10.6B acquisition of Oak Street Health, which came on the heels of CVS’ $8B acquisition of Signify Health, which closed at the end of March. The two landmark acquisitions position CVS to become a leading player in at-home and clinic-based delivery of at-risk primary and chronic care for Medicare and dually-eligible Medicaid patients. With plans to integrate these new assets, achieve double-digit growth in its Medicare Advantage business, and expand Oak Street clinics by 20% this year, CVS’ growth strategy remains formidable, even without a clinical trial platform.  

So what does this all mean for other retail innovators in the clinical trials space and trial sponsors hoping to work with them?

Pulse-check on the other retailers in the clinical trial space

In the past year, Walgreens, Walmart, and Kroger all followed CVS’ lead and launched similar community-based trial businesses. The fundamentals of the offering-market fit are solid—80% of clinical trials are delayed due to recruitment shortfalls, which cost sponsors between $600,000 and $8 million for each day that a trial delays commercial launch. By leveraging their wide geographic footprint of stores, retail engagement and data on diverse consumer populations, and trusted presence in local communities, these retail giants aim to help life science companies cut trial recruitment costs, reduce attrition, and improve equity and representation in clinical research. 

Walgreens, whose program is perhaps the furthest along of the remaining contenders, promptly issued a statement that it would be moving full steam ahead with its clinical research strategy. Walgreens recently partnered with Prothena to recruit and enroll patients for its Phase I ASCENT-2 trial for treatment of Alzheimer’s. Walgreens also launched a research library with 140+ published clinical studies and partnered with Pluto Health to establish infrastructure for assembling 360° records of patients’ clinical and social determinants of health (SDOH) data, which will also enable care coordination.

It’s unlikely Kroger has changed course, considering leadership’s comments touting its months-old clinical trials offering in multiple interviews last week. Kroger recently initiated recruitment for its inaugural trial with Persephone Bio, which will focus on identifying microbiomic markers of colorectal cancer in a small initial cohort (N=55). Notably, if the Kroger-Albertsons merger closes, the resulting behemoth would rival Walmart’s scale and could leverage Albertsons’ new digital consumer engagement solution to support clinical trials.

Walmart has not yet commented on the news. Walmart has made some initial investments (e.g., launching the MyHealthJourney patient app, which aggregates health information and surfaces trial participation opportunities), and has not yet made announcements of commercial traction for its nascent offering. 

Implications for life sciences companies and other trial sponsors

It’s still early days for the other retailers in the clinical trial space, none of whom have publicly landed major deals (i.e., large cohorts or global pharma sponsors). By contrast, three of CVS’ five active trials were for Lilly and Takeda. While CVS has promised to ensure a smooth transition for these trials—and may be able to fulfill its obligation for its current sponsors before shuttering the offering for good—it remains to be seen how CVS’ exit will impact other retailers’ clinical trial pipelines. 

While current signs point to other retailers staying the clinical trials course, Walgreens, Kroger, and Walmart are also aggressively pursuing care delivery strategies and have made sizable investments in the last two years (e.g., Walgreens' $9B acquisition of Summit Health and $5.2B investment in VillageMD, Walmart’s acquisition of MeMD and current buildout of 75+ Walmart Health Centers). As we’ve discussed in prior pieces, retail care delivery is likely here to stay. With that in mind, it’s not unreasonable for trial sponsors to wonder whether these retailers could find themselves in CVS’ position and enter new contracts cautiously. That said, there are a few opportunity areas where the benefits of working with a retailer likely still outweigh potential risks for sponsors:   

• Studies expected to face challenges in recruiting representative cohorts and thus at-risk for failing to meet the study’s diversity action plan, a new FDA legal requirement
• Indications for which it is especially challenging or costly to identify and enroll eligible participants in traditional sites of care, who retailers may be better able to access given their geographic reach and community engagement (e.g., rare diseases)
• Smaller biopharma, biotech, or digital health sponsors who may face greater financial pressure to mitigate risk of trial failure due to recruitment or attrition
• Studies prone to high attrition (e.g., due to frequent follow-ups) for which a retail delivery model can significantly improve convenience and likelihood of follow-through
• Studies for highly prevalent conditions (e.g., cardiometabolic and kidney disease) or with broad population utility (e.g., vaccines) in which retailers can help meet patients where they are and support education and enrollment    

Instead of viewing CVS’ exit from the trials space as a bellwether of tribulations for other retailers, sponsors should identify which trials in their pipelines align well with retailers’ core competencies (e.g., scale, community relationships, convenience) and focus near-term collaborations there. Perhaps CVS’ exit will create more breathing room for other retailers, who may lean into advancing their trial services. One thing is for certain—in this high-pressure market environment, we expect to see many more strategy shifts across the digital health ecosystem. 
 

Rock Health Advisory is a digital health strategy group that helps enterprise companies understand and act on opportunities, craft novel solutions, and succeed in an evolving healthcare landscape. For insights and strategic guidance on navigating the clinical trial landscape, reach out to advisory@rockhealth.com.