Walgreens was once one of the largest retail pharmacy chains in the world. In the years leading up to the class period, the retail pharmacy industry struggled amidst price pressures, online competition, and other operational challenges. While Walgreens’ top competitors responded by successfully expanding into the healthcare market as an avenue for growth, the company stood on the sidelines and saw its stock price languish. Ultimately, Walgreens decided it would follow suit and go “all in” as a full-fledged provider of primary healthcare. To that end, in the months leading up to the class period, Walgreens announced that it would invest billions of dollars in a partnership with VillageMD—a startup primary care provider with a network of thousands of physicians—to enable the roll out of doctor-staffed, full-service primary care clinics at roughly 1,000 of Walgreens’ 9,000 U.S. stores, which the company dubbed “Village Medical at Walgreens.”
Throughout the class period, Defendants touted Walgreens’ partnership with VillageMD as “the key to unlock material, enhanced, long-term growth” for the company that would provide synergies in its core business through an “uplift” in prescriptions and retail purchases from VillageMD patients. The class action alleges that, during the class period, Defendants made materially false and/or misleading statements and failed to disclose material adverse facts about the company’s business, operations, and prospects. In particular, Defendants falsely represented the progress and performance of the VIllageMD strategy, including the number of “co-located” Village Medical at Walgreens clinics Walgreens had opened, or was “on track” to open, in 2022, 2025, and 2027, as well as the company’s ability to adequately staff the clinics with primary care physicians.
Unbeknownst to investors, from the inception of the clinic rollout, VillageMD and Walgreen’s healthcare-centric strategy was an unmitigated disaster. Indeed, as a direct result of the company’s disastrous foray into healthcare, Walgreens has suffered billions of dollars in losses; its CEO and CFO both suddenly resigned within 40 days of each other under highly suspicious circumstances; and the massive losses caused by VillageMD forced Walgreens to completely abandon the healthcare market and close thousands of its stores across the country. Moreover, these losses decimated the company’s stock price, causing it to lose more than three-quarters of its value during the class period. By the end of the class period, VillageMD was virtually worthless, and Walgreens was in freefall, with the company reporting its first annual losses in its 123-year history. Ultimately, in August 2025, Walgreens was so decimated by VillageMD and its primary healthcare strategy that it was forced to sell itself to a private equity firm at a fraction of value during the class period.
The class action is being led by Lead Plaintiff Christopher G. Collins and additional named plaintiff the Fire & Police Employees’ Retirement System of the City of Baltimore (collectively, “Plaintiffs”).
On December 20, 2024, Plaintiffs filed the consolidated class action complaint. On February 18, 2025, Defendants filed a motion to dismiss the consolidated complaint, which Plaintiffs opposed.
On January 5, 2026, the Court granted in part, and denied in part, Defendants’ motion to dismiss. Specifically, the Court sustained securities fraud claims against Walgreens and Individual Defendants Brewer, Kehoe, and Driscoll—Walgreens’ former CEO, CFO, and COO, respectively—for certain alleged false statements and material omissions beginning on October 13, 2022. The Court determined that Walgreens and the Individual Defendants made materially false and misleading statements with the requisite fraudulent intent by publicly claiming that Walgreens’ rollout of VillageMD co-located clinics was proceeding after the Defendants had already “decided internally to abandon the roll-out” without disclosing that material fact to investors. The Court explained: “To say that Walgreens was ‘doubling down’ on opening clinics when the opposite was allegedly true is a straightforward false statement of fact.” The Court further found that, as to the core claim element of fraudulent intent, “[t]aking the facts in the complaint as true it is difficult to believe that [Defendants] could not know that each [sustained] statement was false and misleading” when made.
Accordingly, the case has proceeded to the discovery phase.
