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AIPROPX ReportCNBC · 3h ago
As Americans go direct with GLP-1 prescriptions, Walmart, Costco, Amazon will be big weight-loss winners
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As more Americans use GLP-1 weight-loss drugs to shrink their waistlines, retail giants are betting on a bottom-line bump tied to a shift in the way the drugs are priced and purchased. Employers are dropping coverage for GLP-1 drugs like Wegovy and Zepbound in greater numbers, nudging more patients to direct-to-consumer prescription programs , and providing Walmart, Costco, CVS and Amazon the opportunity to gain a greater share of the market.
For the retail pharmacy chains, a GLP-1 prescription is evolving into more than a simple sale — it's creating a beachhead to developing customer relationships that can run for years and pull shoppers toward everything else on the shelf. If a customer is going to get their GLP-1s from Walmart, they might as well get all their other prescriptions and load up on deodorant, paper towels, and condiments.
"Retailers are betting that if they can become the front door for obesity care, they'll earn a relationship that extends far beyond a single GLP-1 prescription," said Eric Bormel, managing director specializing in digital healthcare at Solomon Partners' healthcare group.
The DTC GLP-1 programs are customer acquisition tools, Bormel said, and retailers are increasingly valuing the entire ecosystem around the medication more than the medication itself, which is experiencing downward price pressure.
"Everyone recognizes that obesity treatment is becoming a longitudinal consumer relationship," Bormel said, noting that retailers aren't simply fighting over the same customers, but bringing in new ones through the GLP-1 business. It's one of the business tailwinds that is in stark contrast to initial concerns that GLP-1s were a headwind for retailers as consumers cut back on impulse buys and overall grocery spending.
New clothing needs is one way that retailers stand to benefit from GLP-1 usage. But the need for prescription refills fits into an even broader strategy for large retail pharmacy networks that have been betting the weight-loss drug boom, even at low margins, will pay off for their businesses.
"In a retail industry that spends billions chasing foot traffic, that is the most reliable recurring customer relationship on the market," said Jackie Swanson, managing partner at Gartner Consulting.
Walmart becoming the retail pickup point for LillyDirect matters because the patient who collects a prescription walks through the store to reach it. "Pharmacy lock-in is loyalty-program economics applied to medicine, and it works because the refill, unlike almost everything else in retail, is non-negotiable," Swanson said.
She notes LillyDirect's cash prices, which run $299 to $449 a month, with the better pricing tied to refilling within 45 days. "Which is a loyalty program dressed as a discount schedule," Swanson said.
Novo Nordisk's NovoCare has a $199 price for introductory months, which later steps up to $349, a "classic acquisition funnel," Swanson said.
Meanwhile, Costco's Sesame partnership prices Wegovy at around $349 and requires a membership. "So the prescription now helps sell the $65 card," Swanson said.
Swanson says that, for customers, the discount is real, and for chains, what is a deal for customers is a deal for them, too: a minimal acquisition cost for a long-term relationship.
"When a discount is tied to a network, the patient's choice of pharmacy happens at sign-up, not at the counter, and that's a meaningful change for any pharmacy that has historically won business through service and proximity. The economics of these programs favor scale," Swanson said. "The retailer that fills the prescription tends to sell the groceries too, and pharmacy is quietly becoming the membership battleground of American retail," Swanson added.
Walmart, the nation's fifth-largest prescription provider with nearly 4,600 pharmacies, has moved aggressively to capture this shift. In April, the retailer expanded its Better Care Services digital platform to bundle GLP-1 prescriptions with weight-management support like nutrition coaching, fitness apps, and AI-driven coaching tools, while positioning itself as a one-stop destination rather than just a pickup counter. According to the most recent published data from Drug Channels Institute, a pharmacy industry research firm, Walmart currently holds 4.8% of the pharmacy market, well behind CVS's 14.7% and Walgreens' 14.6%. The DTC GLP-1 gives Walmart a new tool to try to catch up.
Amazon, which has spent years attempting to increase its healthcare footprint, is targeting the opportunity as well. In April, the company launched a GLP-1 management program through Amazon One Medical, the primary care business it acquired in 2022, and Amazon Pharmacy, offering insured patients prices as low as $25 a month and providing same-day delivery in nearly 3,000 cities, expanding to 4,500 by year's end.
Capital from retailers is flowing into weight-management platforms, virtual obesity care, nutrition coaching, metabolic health solutions, and employer care management programs.
The focus on GLP-1s from the major retailers is not new. As far back as 2023, then-Walmart CEO Doug McMillon said the company expected weight loss drugs to help drive sales . But that didn't necessarily translate into profitability. "Sales dollars are a lot bigger than the margin dollars," said Kroger CEO Rodney McMullen at that time. "The impact on profitability is pretty narrow," he said.
The big retailers have also struggled in the past to capture a broader slice of the healthcare pie. Walmart shuttered its Walmart Health clinics and virtual care service entirely in 2024, closing all 51 locations across six states after concluding the primary-care business wasn't sustainable amid reimbursement pressures and rising costs — five years after it first opened the clinics.
Amazon's history of healthcare efforts includes shutting down its Amazon Care telehealth service at the e...
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