Walgreens’ (WBA) inventory is down greater than 50% this yr as the corporate continues to face retail headwinds and pivots to a model new technique for the pharmacy chain.CEO Tim Wentworth, who has been on the job for eight months, laid out an aggressive plan to revamp the corporate on its third quarter earnings name Thursday.The longer term Wentworth envisions is one during which pharmacies are native hubs for healthcare entry.The well being ecosystem idealizes pharmacies — chains, independents, and on-line — as a method to keep affected person well being. They’ve additionally been seen as professional consultants within the case of minor healthcare wants starting from recommendation on over-the-counter merchandise to serving to administer specialty medicine on web site.Wentworth desires to double down on that concept by investing in expertise to assist automate duties for pharmacists to be able to free them up for sufferers’ wants.”I’m assured WBA will likely be a frontrunner in the way forward for healthcare, with pharmacy and retail at its middle,” Wentworth mentioned.Nevertheless, that technique hasn’t labored previously.Robust economicsThe thought of your pleasant neighborhood pharmacist clashes with the economics of operating a pharmacy and the way they receives a commission by pharmacy profit managers.It is the wrestle pharmacies of all sizes face with ever-decreasing reimbursements from the three largest pharmacy profit managers: CVS Caremark (CVS), UnitedHealth’s Optum Rx (UNH), and Cigna’s Specific Scripts (CI), the place Wentworth beforehand served as CEO.Wentworth mentioned he’s combating “to align incentives and guarantee we’re paid pretty.”Pharmacies have been combating since earlier than the pandemic. The influence of shopper developments on front-of-store gross sales (for magnificence and meals objects), in addition to the stress of being paid pretty for prescriptions, has been the main target of earnings requires years — and was a catalyst for each Walgreens’ and CVS’s healthcare providers technique.COVID supplied a quick reprieve for pharmacies, with elevated revenues from vaccines, testing, and the necessity for over-the-counter medicines.That has since tapered off, forcing pharmacies to scale back enterprise hours, shut shops, and rethink find out how to greatest make the most of storefronts to serve evolving affected person wants.On this June 4, 2014, file photograph, individuals stroll right into a Walgreens retail retailer in Boston. (AP Photograph/Charles Krupa, File) (ASSOCIATED PRESS)Lengthy-term viewOne space during which Walgreens is forward of the competitors is medical trials.The corporate has been changing walk-in clinic areas into medical trial areas and efficiently clinched a take care of Boehringer Ingelheim.The US Meals and Drug Administration (FDA) not too long ago introduced necessities for drug firms to diversify their medical trial participant pool, for which Walgreens is now nicely poised.Story continuesBut that did not cease the sell-off Thursday on the information that the corporate can be struggling within the quick time period. It result in the worst day for the corporate in practically 4 many years, closing 22% decrease Thursday.Most analysts consider the corporate is using a stable technique, however it should require persistence to execute, particularly as a key income, PBMs, are more and more changing into competitors.JPMorgan’s Lisa Gill mentioned in a be aware late Thursday that the method would take time.”We proceed to consider that within the longer-term, WBA has the potential for progress. If there’s a silver lining to this print, we consider that the corporate is making the mandatory steps to stabilize its footprint and dealing with PBMs and payors to handle reimbursement headwinds,” she wrote.Financial institution of America’s Allen Lutz equally famous, “It’s crucial that Walgreens pushes again extra assertively in opposition to PBMs to seize a extra cheap return on capital.”However, he added, “It isn’t absolutely clear if a extra aggressive push by retail pharmacies would yield favorable outcomes. Nevertheless, the chance from persevering with down the present path for WBA could show worse.”Walgreens is the most important retail pharmacy chain, with practically 10,000 places. Competitor CVS has greater than 9,000, and RiteAid — which is at the moment in chapter even after Walgreens acquired practically 2,000 places — has lower than 2,000.Anjalee Khemlani is the senior well being reporter at Yahoo Finance, overlaying all issues pharma, insurance coverage, care providers, digital well being, PBMs, and well being coverage and politics. Comply with Anjalee on all social media platforms @AnjKhem.Click on right here for in-depth evaluation of the most recent well being business information and occasions impacting inventory pricesRead the most recent monetary and enterprise information from Yahoo Finance