Walmart Ups Its Digital Health & Wellness Capabilities With $200M Purchase Of CareZone App - pymnts.com

Walmart has purchased a health services technology company that promises to manage prescription drugs for each family member, the Arkansas-based chain announced on Monday (June 15).

CNBC reported the world’s largest retailer paid about $200 million for CareZone, the Seattle-based tech start up. Customers can use the app to scan labels or insurance cards to speed and simplify the process.

“Acquiring the technology platform of CareZone is another example of our continued commitment to helping lower the cost of healthcare for our 160 million customers who shop Walmart each week, while offering convenient options across multiple channels to help them manage their health and wellness,” Walmart said in a statement.

The purchase adds to Walmart’s health and wellness capabilities and supports its focus on digital healthcare solutions, the company said. It also makes Walmart more competitive in the $500 billion prescription drug space after Amazon bought PillPack, a pharmacy delivery and medication management startup, in 2018 for $753 million.  Walmart lost out on a chance to buy the company after Amazon’s bid came in higher.

Launched 10 years ago, CareZone develops apps to help patients manage their medicines. It also built technology for users to scan insurance cards and prescription drug labels, making it easier for users to determine what’s covered by their health plan or to organize a home delivery.

CareZone said the apps have about 3.5 million members.

“The goal of any technology startup is to build a product or experience that touches the lives of as many people as possible,” said Walter Smith, co-founder and chief technology officer of CareZone, in a statement. “Adding our technology platform to Walmart’s existing digital capabilities and physical reach creates a unique opportunity to redefine what the future of digital health and wellness can look like.”

Walmart’s blog said a recent survey of U.S. customers found that cost is the top barrier to health care for 43 percent of Walmart shoppers, followed by convenience and access.

Under the terms of the deal, Walmart is getting CareZone pharmacy, which sorts customers’ medications into pill packs and mails them to patients via mail. But the company will remain separate, Walmart confirmed to CNBC.

The deal comes as CareZone’s pharmacy division is party to a lawsuit with Express Scripts, which ended CareZone from its network over a contract dispute.

CareZone CEO Jonathan Schwartz told CNBC at the time that it would stand to lose about 900 customers if Express Scripts, which negotiates drug prices on behalf of insurers, did not reverse its decision.

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