March 2025 Healthcare Roundup: M&A Momentum, Market Shifts, and Policy Shakeups Signal Industry Transformation
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March saw a surge in digital health M&A activity, signaling a broader trend toward consolidation in the sector. Walgreens' $10B acquisition reflects shifts in retail pharmacy, 23andMe’s bankruptcy highlights the challenges of standalone health models, the shift in US healthcare policy is underscored by significant cuts to the HHS.
Walgreens to be Acquired in $10B Take-Private Deal
March 7 - Walgreens entered into an agreement to be purchased by Sycamore Partners. The private equity firm agreed to pay $11.45 per share, resulting in an equity value of approximately $10 billion. Walgreens shareholders were also set to receive an additional $3 in cash from the future monetization of the company's debt and equity stakes in primary care provider VillageMD.
Why it matters: The acquisition of Walgreens by Sycamore Partners reflects the changing retail pharmacy landscape. In particular, concerns have been raised that profitable stores in wealthier areas may be sold, while locations in underserved communities may shut down, affecting public health. Retail pharmacies offer immediate access to medications, vaccines, and vital healthcare services, particularly in areas where options for chronic condition management, like hypertension and diabetes, are limited.
23andMe Files for Bankruptcy
March 24 - Human genetics and biotechnology company 23andMe has filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Eastern District of Missouri to facilitate a sales process. The company announced that it intends to continue operating throughout the sales process without any changes to how it stores, manages, or protects customer data.
Why it matters: 23andMe struggled to sustain its business model, falling short in its attempt to convert one-time DNA test buyers into subscribers with ongoing health insights. The company also shifted focus to drug discovery, leveraging its vast genetic database. Its bankruptcy highlights the challenges of standalone health solutions that lack integration into traditional healthcare systems.
Massive cuts to Health and Human Services’ Workforce Signal a Dramatic Shift in US Health Policy
March 27 - The Department of Health and Human Services (HHS) announced it would reduce its workforce by 10,000 employees as part of a sweeping restructuring effort, Secretary Robert F. Kennedy Jr. Overall, the department’s workforce will shrink from 82,000 to 62,000 full-time employees, including cuts to the FDA, CMS, and NIH. Additionally, the plan will streamline HHS by consolidating its 28 divisions into 15, including a new Administration for a Healthy America (AHA), and centralizing core functions like HR, IT, and Policy. Regional offices will be cut from 10 to 5.
Why it matters: While these cuts may yield limited short-term savings, they significantly reshape U.S. health policy and research, potentially undermining key protections for Americans and slowing scientific progress. Experts warn the broad, poorly targeted reductions could lead to greater inefficiencies and waste in the long run.
Other stories that caught our eye this month:
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