Walmart Ups Its Digital Health & Wellness Capabilities With $200M Purchase Of CareZone’s Technology

Walmart has reportedly paid some $200 million to buy key assets from CareZone, a Seattle-based health-technology start-up that promises to manage prescription drugs for each family member.

“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 world’s largest retailer didn’t disclose how much it paid for the assets, but CNBC cited an unnamed source as putting the deal’s price at about $200 million.*

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 told CNBC 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,” Walter Smith, co-founder and chief technology officer of CareZone, said 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 said the purchase adds to its health and wellness capabilities and supports its focus on digital healthcare solutions. The company said a recent survey found that cost is the top barrier to healthcare for 43 percent of its U.S. customers, followed by convenience and access.

The deal 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.

However, Walmart’s latest deal doesn’t include CareZone’s pharmacy division,* which sorts customers’ medications into pill packs and mails them to patients via mail. CNBC reported that the company’s pharmacy unit is currently involved in a lawsuit with Express Scripts, which dropped CareZone from its network over a contract dispute.

(*Editor’s note: An earlier version of this story incorrectly stated that Walmart was buying all of CareZone, including its pharmacy division. However, Walmart is only buying select assets from the company.)