Walgreens Boots Alliance, Inc. (NASDAQ:WBA) TD Cowen 9th Annual FutureHealth Conference September 10, 2024 4:10 PM ET
Company Participants
Ramita Tandon – Chief Clinical Trial Officer
Conference Call Participants
Charles Rhyee – TD Cowen
Charles Rhyee
All right. I think, we’re going to get started with our last session of the day, and thanks everyone for sticking around here. So, in June of ’22, Walgreens launched its clinical trial business, which utilizes Walgreens national retail pharmacy footprint to provide patient recruitment, trial conduct and real world evidence services to biopharma sponsors. And the company has recently prioritized expanding the services that Walgreens provides through its pharmacy network and its clinical trial is expecting to play a central role, as it moves forward here.
And todays discussion, we’re joined by Ramita Tandon, Walgreens, Chief Clinical Trial Officer. Ramita joined Walgreens in 2021, and she’s tasked with building out Walgreens clinical trial capabilities. And now has seen the business develop into a profitable operation that serves over 25 manufacturers across 35 trials. Prior to Walgreens, Ramita has spent over 25-years in the life science space, including positions at ICON and PAREXEL in various roles that, focus on disrupting the clinical development cycle and bringing products to enhance patients faster.
So, Ramita, thanks for being here with us today.
Ramita Tandon
Thanks for having me Charles.
Question-and-Answer Session
Q – Charles Rhyee
Maybe to start off, can you help us understand what is it that Walgreens is providing in its clinical trials offerings today?
Ramita Tandon
Like you said, we launched our clinical trials business in June of 2022, with the idea of just redefining that patient experience, and really looking at ways to tackle the issues around lack of patient access, and lack of representation that has plagued our industry for a very long time. So our focus has been just, how do we get access to patients faster? How do we, improve the representation – in the drug development process?
And so, since we’ve launched back in 2022, I’m pleased to say that the work that we’ve been doing with our partners today is, proving out that the Walgreens ecosystem and the assets that we’re using, to help support our pharma partners has been working. We certainly have been helping our pharma partners, to find those patients for their trials. But more importantly, the patients that are in these communities that have historically not been represented in research.
They’re becoming part of the drug development process. And so, as we think about the how, from a Walgreens perspective, we wanted to design the business model that, would look to sort of solve some of the pain points that pharma faces, as they think about their R&D portfolio, and as they think about their trials, right. A big part of the pain point is, finding patients for trials, getting those trials done in efficient fashion.
So, they can get to the FDA for approval. And so, we organized our business model around three key service offerings. The first one is, around what we call insights driven patient recruitment. And that’s really accessing the Walgreens. Patient access, direct patient access of 100 million lives, and really helping pharma to help identify, those right patient populations.
Because we sit on, what we call a live breathing network of a number of patients, we can index those patients by race, gender, ethnicity, social determinants of health, even by zip code. So we’re applying a lot of precision, of how we find those patients. And because we’re a covered entity, it allows us to then outreach, which puts us in a very unique position.
So not only can we find those patients, we then have the ability to outreach to those patients directly. And so, the insights that we have within the Walgreens ecosystem, allows us to really create more culturally relevant outreach modalities, because obviously, within Walgreens, we’re constantly reaching out to our consumers, our patients.
We’re using that insights to help us get patients interested, and wanting to participate. So that’s that first service line, Charles. The second service line is, what we call trial conduct. This is what we’ve developed, to really tackle the issues around accessibility. And we created sort of a flexible set of options, because we know, from a trials perspective, trial design, patient populations, the disease conditions, are not all the same.
And as we think about it from a patient’s perspective, the communities that we serve across Walgreens are not the same. So the way they consume information is, not the same. And so from our side, we built the trial conduct offering, to do a couple things. Number one, we’re using our pharmacy locations where we have private health rooms, anywhere from 500 square feet, to 5,000 square feet with multiple exam rooms.
That offers patients to come in, first and foremost, be educated about what a clinical trial is. Because I can tell you, a number of folks don’t even know what clinical research is, and the value it has in their own care journey, but then they can go in and get consented. We then take them further in the journey, where they can actually have clinical trial services, screening, diagnostic and blood draws.
And the idea again is, to be able to tackle the issues around accessibility, because historically, and to some extent today, many patients are unable to get to the academic medical centers or physician practices, because they’re too far. They can be anywhere from an hour, an hour and a half. And that’s posing a lot of barriers, for broader participation in research.
The second format that we have in place is, what we call hybrid. That really sort of brings together the store on site locations, but also digitizing aspects of the workflow, because we know aspects of clinical trials is, becoming digitized, and it provides more convenience for patients to be able to participate. And then the third option is, really centered around at home.
So today, we’re running a clinical trial, where we actually can take the clinical trial services at a patient’s home. So, we’re actually sending out nurses, study coordinators and other healthcare professionals, while the physicians are able to provide the oversight via telehealth. So that flexibility, allows our patients opportunities to participate, and get part of the drug development process.
And the third service offering that we’ve put in place, to support our pharma partners is, what we call Real-World Evidence Informatics. And really, Charles, it’s all about just tapping into the, the information that we have on our consumers and patients, help pharma as they think about their evidence generation planning, as they think about retrospectively.
They’re looking to understand patient populations, treatment regimens, and then also prospectively, as they’re looking to collect data on, whether it’s qualitative or quantitative, post market. So, it could be post market commitment studies, it could be REMS safety surveillance programs. But our pharma partners are reaching out to us, to help in those efforts.
Charles Rhyee
And when we think about these three service offering lines, should we think about within certain therapeutic areas that you’re best positioned to help pharma in? What therapy areas are you may be initially focused on? Where could that expand to?
Ramita Tandon
Yes, it’s a good question. So, we can work across a wide variety of therapeutic areas, just the ones that are in-flight today. We’re working on some diagnostic and screening in lung cancer, and colon cancer. In fact, we’re enrolling up to 50,000 patients, across these trials that are coming into our stores, for some of these clinical trial services. We’ve got diabetes, cardiovascular outcome, heart disease trials, and certainly vaccination programs.
Generally speaking, certainly the general health population type of disease indications, makes sense for us to be able to support our pharma partners. There are some specialty conditions. Certainly, we have specialty pharmacies within Walgreens that, allows us to tap into that ecosystem, to help support our partners.
Charles Rhyee
And maybe talk about, the role of the pharmacist in all this. You’re bringing this kind of services into the, into the pharmacy store itself. Talk about how, the pharmacist interacts with it, and how do you incorporate into the workflow, perhaps not to create an undue burden since they have other responsibilities?
Ramita Tandon
Yes, let me just first start by saying Walgreens is, an essential part of healthcare, just as it’s essential to, retail and pharmacy. And so, as we think about our commitment to the clinical trials business at Walgreens, it’s really expanding our ability to provide additional healthcare offerings, value-based solutions to our patients and their needs. I mean, these are patients that, we’re dealing with every single day across this nation.
So, as we think about what we do at, within clinical trials, it really is a natural fit, with our core retail pharmacy business. And you heard us, as a company talking about moving forward, providing more focus and investments that will build off, of our core capabilities and really start to provide differentiation and value to our stakeholders, whether they’re payers, whether they’re healthcare systems.
And this in case, in pharma, in a capital light way. So clinical trials represents, a great example of building off our core capabilities in a capital light fashion. Now, as we think about, how we execute a lot of this, as I think about sort of the ingredients of success that, we’ve had in the last two years in some of the growth in clinical trials, it’s really around our clinical trials team, forging the strong relationships with our retail, and our pharmacy colleagues.
And that’s really in two parts. Number one, our colleagues are working with consumers and patients on a regular basis. They understand how to engage the consumers. What are the right modalities? What are the right engagement models? So, we’re using those insights, to help support pharma as they’re looking at ways, novel ways, to reach out to patients to help support their R&D portfolio.
And then secondly, we just want to make sure, we’re providing a good patient experience for our patients as they participate in clinical trials, particularly the first time. But we are very intentional, about how we staff and assign tasks for clinical trials. When we conduct a clinical trial at Walgreens, we bring in clinical trial experts.
People who have strong tenure in the space, whether they’re coming from pharma, CROs, or SMOs. And they’re responsible for designing and executing the clinical trials. In part, it’s to make sure that, we’re adhering to all the compliance regulations that govern our ecosystem, but more importantly, that we’re not providing undue burden to the pharmacist. So that’s one example.
And the second is, where we have our stores that have been converted as clinical trial centers. We have onsite staff, and they’re working closely with the pharmacist, to help us identify and just drive awareness, about the clinical trials that we’re running at Walgreens. In case in point, today, when patients are going in to pick up their scripts, and we’re running a clinical trial.
And a patient might be eligible for that trial, it gets flagged in the pharmacy system that, the pharmacist can see it, that that patient is eligible for that trial. So the pharmacist will then, naturally let the patient know that they’re eligible for a clinical trial. If they want to learn more, the information will be – in their script bag on a QR code, or they can go talk to one of the clinical research professionals that, are in the private health rooms.
So again, we’re using the pharmacist to really drive awareness and education. And then finally, the role of the pharmacist is absolutely critical for us at Walgreens. We are, intensely focused to make sure that Walgreens is, seen as the practice setting of choice. We’ve deployed a national clinical trials training program, across the ecosystem. So where pharmacists are interested to become clinical research pharmacists, they have an opportunity to advance their careers.
Charles Rhyee
That’s really great and helpful. When we think about, sort of the role Walgreens has taken in terms of clinical trials. You’ve seen other retail pharmacies, sort of enter the space, but then kind of quickly exit the space. What do you think separates Walgreens, because you’ve built something that’s now profitable on its own? What do you think that, you guys have done differently that’s, kind of enabled you to be more successful here?
Ramita Tandon
Yes, well, let me just preface. I mean, we are the only retail pharmacy out there that’s, providing a mature set of clinical trial services, to our pharma partners today. I think it boils down to the trust, really accessing the full horsepower of Walgreens, the ecosystem, the assets, and stitching in a way that, one is capital light. But two, it affords a differentiation to our pharma partners.
And really helping to solve some of the challenges that, they’re facing to find patients. But it really boils down to really leveraging, the foundation that we have. Certainly, from a Walgreens perspective, we’ve – we’re a trusted brand in our communities, and we’ve been a partner in healthcare, really deploying personalized and local care.
And that’s important, as we unlock and deliver some of those services to our pharma partners that, are looking at ways to build the trust and report, within many communities as well themselves.
Charles Rhyee
Yes. And to add onto that just right, if we think about the research that Walgreens has into underserved communities, over the past few years, the FDA has clearly made a big push to have, greater representation in clinical trials, particularly of underserved communities. Talk about sort of Walgreens unique positioning, and sort of the success you’ve seen in terms of helping pharma be able to, get to those patients?
Ramita Tandon
Yes I mean, obviously, we’re seeing a big push, from the lawmaker, from the agency, patients, and even payers, that are getting, you know getting more, louder about making sure, sample sizes are enriched. And so when medications are, being dispensed from pharmacies, that they can benefit all patients across the nation, right. So, there’s a statistic that the FDA had published about, I think, two, three years ago that less than 5% of the nation, participates in clinical research.
And those that participate, three quarters identify themselves as white. So, what that’s showing is, that we have a significant gap in how these medications, are benefiting the general population. So from a Walgreens perspective, we’re in a very unique position, because we have direct access to diverse patient populations. We’re in communities that most are not.
It’s a natural way to help pharma, be able to solve some of those that issue itself. The good news is, we’re seeing a lot of intentionality behind the design and the operational execution and the need to go after patients and communities that, have never been tapped into in the past. So, it’s a big point of differentiation for us, as we help support pharma in this effort.
Charles Rhyee
And maybe in terms of, like, any kind of examples of success you’ve had in terms of being able to reach these patients?
Ramita Tandon
Yes. So, we’ve just completed a number of trials. So as we complete our trials, we publish our case studies out to the public domain so that we can, folks can start to see the role pharmacy has in clinical research. But a recent vaccination study, a Phase 3 study that we enrolled, we enrolled within 16 weeks of study start. We exceeded all expectations, of the referral rate that was expected of us.
And then, as we think about just the, diverse patient population, we ended up doubling the rate. So, the trial was looking for us to enroll black and Hispanic populations. And the FDA report in 2020, traditionally, it’s around 8%, typically in the single-digits. But for that particular trial, we enrolled anywhere from 15% to 18%, of patients from black and African communities, and Hispanic, and Latina communities.
So that’s just one example, our partnership that we announced with Prothena that, we were looking to help support a Phase 1 potential treatment in Alzheimer’s. Here’s another case, where we brought forth close to 21% of Hispanic and Latina patient populations into that trial.
So what that’s showing is that, because we have access to diverse patient populations. We have the ability to quickly identify those patients, and be able to match those patients to trials faster than, what the industry has been able to do so far.
Charles Rhyee
And I’d imagine for pharma, right, because if I remember how the guidance works, they have to go to the agency prior to Phase 3, right after Phase 2, present a plan on what their patient population will look like. I would imagine what has sort of, been the interest from pharma, as you’ve kind of put out these cases? Is it just mostly inbounds coming into you, or are you kind of reaching out, to kind of show them the information?
Ramita Tandon
When we launched the business back in 2022, the demand was pretty significant. Because that was at the time when, the lawmakers put a provision in the bill around diversity action planning for the industry, for pharma. And so, the ecosystem was naturally trying to scramble, and put together what those diversity action plans would look like, and start to go find partners to kind of help fulfill those commitments.
So, the inbound activity has been pretty significant in terms of Walgreens help us find patients, whether they’re in rural, whether they’re in urban, deep south, help us find patients that will help us to enrich our sample size. So when we do go to the FDA for review and approval, they’re able to present more of an enriched sample size, for our final approvals.
Charles Rhyee
In the past, you talked about how, when the services that you’ll provide pharma, you want to have, like a flexible model and really have your clients, your customers, pharma, guide you in terms of the sort of services you’ll offer. If we think about the three service offerings that you have now, which ones are you mostly doing today? Where is the demand from pharma right now mostly?
Ramita Tandon
Yes, and the good news is, we’re cutting across all three service lines. But as pharma comes into our ecosystem for the first time, certainly leveraging our patient recruitment capabilities and the direct access to the patients, to help them find those patients, to fulfill their commitments to the trials is, just a natural partner for them. And then as they go further downstream and they find those patients.
They recognize that, boy, we’ve got to get those patients into our centers. So we’ve been very flexible in how we work with them, because oftentimes pharma will have designated physician sites or academic medical centers already part of their ecosystem, and then they include Walgreens clinical trial sites as part of that ecosystem so that it becomes convenient for that patient to go in for some of their, basic low acuity services.
So I would say, obviously in the beginning we had tremendous amount inpatient recruitment. But as we build the report, as we published a number of the case studies and the effectiveness that the role of pharmacy plays, it’s naturally then allowed them to continue to build on the additional services for them.
But also, Charles, it takes us from these transactional engagements into more strategic partnerships, where then pharma starts to spend more dollars with Walgreens and starts to look at the asset overall and start to become sort of an end-to-end partner as we think about looking at just beyond recruitment and support, that trial and their patient throughout that service footprint.
Charles Rhyee
Yes, speaking of strategic partnerships, you guys recently announced one with BARDA to drive – I think it comes with a vaccine study, but as well, really kind of looking at innovation for decentralized clinical trials, maybe sort of, in your minds, I think for some investors here, they have an idea of what they think decentralized clinical trials means. Maybe first, what do you think of when you think of the words decentralized clinical trials, what does that mean to you? What can it be?
Ramita Tandon
That’s a good question. From our perspective at Walgreens, decentralizing clinical research is really bringing clinical trials into the communities closer where the patients are. So whether it’s looking at alternative sites of care, whether it’s looking at new digital modalities to engage patients, or in the case of just delivering at patients homes, it’s trying to make it more personalized, it’s making it more convenient, is how we define it.
And so our partnership with BARDA is an exciting one. Obviously, BARDA’s goals are very much aligned with where Walgreens is heading with our clinical trials business. They’re very focused on disrupting the current landscape and improving patient access, improving representation in clinical trials.
And so, certainly with the capabilities that we put in place, they see Walgreens as a natural partner to not only support their vaccine trials that we’re kicking off. But more importantly, the long term partnership and the investment, up to $100 million, is to really build out the infrastructure and using the Walgreens footprint to make trials more accessible and drive more trials into the communities and decentralize the traditional model that has been using, academic medical centers and physician practices that have been fatigued and struggled to bring representative patient populations. And keeping those patients retained in trials has been a big struggle as well.
Charles Rhyee
Yes, maybe if you think about it that way. So you announced another partnership with Boehringer Ingelheim not too long ago. Was that what they’re looking for when they partnered with you? Because it was a Phase 3 trial? Maybe talk about what were the capabilities that they kind of wanted from you?
Ramita Tandon
Yes, BI with the same intentionality in mind around, how do we disrupt sort of the current landscape that we’ve been working through. And how do we find for this particular Phase 3 study focused in obesity and diabetes, going into communities, particularly looking to recruit black and hispanic patient populations in the trials that traditionally are impacted by obesity here in the U.S. And so, they’ve partnered with us to help them find those patients, using our community pharmacies as a way to bring those patients one, to recruit those patients and then bring them in for some of the trial services on site, because, again, in those communities, it’s hard to be able to drive an hour, an hour and a half to designate an academic medical center. So BI made the intentionality and the investment to support Walgreens, community pharmacies to support their Phase 3 trial.
Charles Rhyee
So, this all sounds great. This looks like there’s a lot of demand. Maybe talk about how big can this be? I mean, like – when you – how do you size the market here? What’s the opportunity for Walgreens?
Ramita Tandon
As we step back and look at the overall addressable market, certainly from the types of outsourced services that we’re in today from an R&D perspective, is healthy, and it’s growing. Certainly in the 2023 report that was published by IQVIA, 18% of growth that we’re seeing from R&D large pharma spend in these types of services. And then as we think about just the overall R&D investments is about $150 billion, and 50% of that’s being spent in outsourced services. So from our perspective, there’s tremendous growth for Walgreens to continue down the space and to be able to support pharma and capture these services.
Charles Rhyee
And I guess maybe just the thing in the big picture, like you envision this to be a material part of the Walgreens story as we go forward at some point.
Ramita Tandon
Yes, I mean, certainly it’s a big part of our overall strategy. As I said, it’s about building on the core capabilities of the Walgreens ecosystem and the assets and continue to drive value differentiation for our partners. But as we think about the future of clinical trials and where that’s heading, certainly we’re going to continue to see the momentum of decentralization of clinical research and getting closer into the communities and closer where the patients are. And so Walgreens is very uniquely positioned to help support in that movement.
In that momentum, we’re going to start to see more of improving representation in clinical trials and making sure that therapies and new diagnostics is beneficial for all patients across the U.S. And again, Walgreens is very well positioned to support in those efforts.
Charles Rhyee
And then maybe lastly, right now, we’ve talked about how you’re serving directly to pharma sponsors, but the CRO industry itself is very large. You came from it yourself. Have you seen them sort of reach out because obviously the Group is concerned about sort of maybe some slowdown in demand and some characteristics, and I wonder how much of that is maybe pharma kind of looking for new ways to do things. And what kind of role do you think Walgreens can play supporting even CROs perhaps?
Ramita Tandon
Yes, we’ve been tapped by number of CROs to help them support their efforts to find patients and help fulfill some of the commitments that they have with their pharma partners. And I think when we launched the business, we knew early days and especially when pharma was coming to us, that they were looking for alternative ways of finding patients and certainly trying to meet the commitments of the diversity angle and looking to find those diverse patient populations. And same thing with CROs.
CROs are looking at ways for Walgreens to help support some of the representation challenges that they too are facing within their own ecosystem. So, we’ve been very intentional about the partnerships that we’ve brought into our ecosystem. We want to make sure that it’s advancing our own objectives as we work directly with pharma partners. But certainly the lens of a CRO is there’s an opportunity for partnership in help support some of the portfolio of studies that they’ve got within their own ecosystem.
Charles Rhyee
Got it. So maybe last question here, you touched a little bit about it before, but look out 5, 10 years, what do you think sort of the clinical trial industry looks like? What is the role you see Walgreens fitting into it?
Ramita Tandon
Yes, the role of pharmacy and the pharmacist is going to be quite essential. We believe that it’s essential to healthcare, just like it’s essential retail and pharmacies. I said earlier, and that trust, the scale, the accessibility, is going to be quite critical for us to continue to move the momentum so that we can help our pharma partners fulfill the commitments within their R&D portfolios. Decentralization of clinical research is going to be the future as we think about just bringing trials into the communities. Government entities like BARDA certainly is moving down that path. There’s entities like NIH that’s also looking at ways to go into the communities and get access to patient populations and get them to view as a care option in their overall healthcare journey.
So, we’ve built the model to be very flexible. We’re leveraging the full assets and the capabilities of Walgreens to kind of help support the movement and the continued investments in clinical research, particularly in the decentralization of clinical research.
Charles Rhyee
Great. Well, I think we can end it there. Thank you so much, Ramita, for joining us today. Really appreciate all your insights, and thank you, everyone, for being here with us today. That concludes the program for today. And thank you for all being here.
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