Shields Health Solutions Secures Strategic Equity Investment from WCAS and Walgreens to Expand Integrated Specialty Pharmacy Platform

On July 31, 2019, VCBeat (WeChat ID: vcbeat) learned from foreign media reports that health solutions company Shields Health Solutions, WCAS (Welsh, Carson, Anderson & Stowe), and Walgreens (Walgreen Co.) announced they had reached a final agreement under which WCAS and Walgreens would make equity investments in Shields Health Solutions. The terms of the agreement were not disclosed at this time.

Shields is a leader in comprehensive specialty pharmacy care in the United States. Currently, Shields partners with more than 30 leading health systems across China to establish specialty pharmacy programs, providing care management for complex specialty conditions, including oncology, neurology, rheumatology, and diabetes.

Jack Shields, Founder and CEO of the company, stated, “These investments serve as extraordinary validation of our ability to achieve our goals. Our vision is to place health systems, patients, and care professionals at the center of our mission by delivering integrated specialty pharmacy care. The integrated specialty pharmacy program will enable health systems to provide a more comprehensive model of care for patients—improving outcomes and reducing total costs.”

Through agreements with WCAS, a private equity firm focused on healthcare and technology, and Walgreens, one of the largest pharmacy chains in the United States and a trusted pharmacy services provider, Shields is also expanding its business into new regions to deliver comprehensive services and technology.

Jack Shields added, “We are delighted to have found our ideal partners. With WCAS’s decades of industry expertise in investing in mature, growth-stage healthcare companies and Walgreens’ nationwide pharmacy operations experience, their involvement will accelerate Shields’ growth and expansion, bringing the Shields model to more health systems across China and better serving patient populations.”

Tom Scully, General Partner at WCAS and former Administrator of the Centers for Medicare & Medicaid Services (CMS), stated, “Jack and the Shields team have created a unique patient care model that is highly effective in supporting patients who use specialty pharmacy medications and biologics. The Shields clinical staff are passionate about their work, and we are delighted to be part of Shields. Walgreens has also been an excellent partner throughout this process, bringing extensive knowledge and resources to the industry. We are excited about the opportunity to collaborate with these two new partners to build a great specialty services company.”

Walgreens President Alex Gourlay stated, “Specialty pharmacies play a critical role in ensuring truly continuous care for patients with complex, chronic conditions. This is reflected in new and differentiated healthcare services, such as the development of care models, which can help meet the evolving needs of patients, payers, and providers. Through our partnership with Shields and WCAS, we are committed to creating end-to-end solutions that complement our existing specialty pharmacy footprint and further improve patient care.”

Subject to customary regulatory review, the transaction is expected to close in the third quarter. Centerview Partners served as financial advisor; Goodwin Procter LLP and Pepper Hamilton LLP acted as legal counsel to Shields Health Solutions; Ropes & Gray LLP served as legal counsel to WCAS; and Sidley Austin LLP acted as legal counsel to Walgreens.

Shields Health Solutions is a specialty pharmacy integrator and care provider that partners with hospital leaders in all aspects of creating, developing, and managing specialty pharmacies. Shields offers the fastest and lowest-risk model for health systems to create or expand hospital-owned specialty pharmacy programs. Since 2012, Shields has collaborated with health systems by providing on-site pharmacy and nursing professionals, a purpose-built specialty pharmacy technology platform, and access to nearly all limited distribution drugs (LDDs) and most health insurance payers across China. Shields maintains ownership of all specialty pharmacy assets under the name of the health system.

By “embedding” centralized infrastructure and providing a differentiated care model with on-site, high-touch pharmacy liaisons, Shields delivers superior value and a best-in-class experience for health systems, patients, payers, and manufacturers. This is driven by unparalleled medication adherence (92%), faster time to therapy (<48 hours), improved patient satisfaction (85 NPS), reduced readmissions, lower healthcare expenditures, and fewer adverse events.

Walgreens is one of the largest pharmacy chains in the United States, operating under the U.S. Retail Pharmacy segment of Walgreens Boots Alliance, Inc. (NASDAQ: WBA). Approximately 8 million customers interact with Walgreens daily through its stores and online platforms, where the company provides highly accessible, omnichannel consumer goods and services, as well as trusted, cost-effective pharmacy, health, and wellness services and advice. As of August 31, 2018, Walgreens operated 9,560 pharmacies across all 50 U.S. states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands, supported by its omnichannel platform, Walgreens.com. Around 400 Walgreens locations offer medical clinics or other retail clinic services.

WCAS is a leading U.S. private equity firm focused on two target sectors: technology and healthcare. Since its founding in 1979, the firm’s strategy has been to partner with exceptional management teams to create value for investors through operational improvements, organic growth initiatives, and strategic acquisitions. WCAS has raised and managed over $27 billion in committed capital.

(Compiled by Xu Wenjuan)