WHEN: Today, Tuesday, February 9th
WHERE: CNBC’s “Healthy Returns Spotlight: Prognosis for Recovery”
Following is the unofficial transcript of a CNBC interview with Rick Gates, Walgreens Pharmacy & Healthcare SVP, and CNBC’s Senior Health & Science Reporter Meg Tirrell live during CNBC’s Healthy Returns Spotlight today, Tuesday, February 9th. Full video will be available at cnbc.com/healthy-returns.
All references must be sourced to CNBC’s Healthy Returns Spotlight.
Realtime Transcription by www.RealtimeTranscription.com
TYLER MATHISEN: Walgreens is at the center of the vaccine rollout and will play an increasingly vital role in the coming weeks and months in inoculating millions of Americans in all corners of the country. To give us a behind-the-scenes look at this monumental challenge is Rick Gates, the head of pharmacy and healthcare at Walgreens, and he will be interviewed by my friend and CNBC’s senior health and science reporter, Meg Tirrell. Meg, the floor is yours.
MEG TIRRELL: Thank you, Tyler. And Rick Gates, thank you so much for being here with us for Healthy Returns. You guys, of course, are in a very busy time right now. On Friday, you kick off your participation in the federal pharmacy program, so at, you know, some of your locations across the country, you’ll be administering vaccines. You’ve already been doing that in partnership with some states and, of course, in long-term care facilities. But let’s start with the question I think everybody wants to know, which is: When do you think anybody can walk into a Walgreens pharmacy or go to your website and make an appointment to get a COVID vaccine?
RICK GATES: Yeah, I wish I had the answer that everybody is asking. You know, it comes down to, obviously, supply. You know, and right now, where you’re looking is a balance between vaccine availability, as well as understanding eligibility for patients as well. We don’t believe, if you look at the trajectories of vaccines being produced, that we’re going to see widespread availability probably until the spring. I would say late March and early April will be the time that you will have it more broadly across all of our stores, across the nation, in pharmacies and other places to start vaccinations.
MEG TIRRELL: I mean, late March, early April isn’t actually that far off. We’re almost halfway through February. So that’s not as terrible as I was thinking you might say. But tell us about the supply you’re going to start getting now through this federal pharmacy program. I understand that you told Shep Smith about 170,000 doses you expect in the first week. Tell us about just sort of the pace of supply you’re expecting over the coming weeks.
RICK GATES: Yeah, I think it’s important for everybody to remember that how this is set up, this is a federal pharmacy program that is taking allocations, obviously, through the Biden administration, OWS and CDC, and then allocating it across the pharmacies, the 15 or so pharmacy chains that have really stepped up to say they’re going to help during this first session. So a million doses were allocated for the first launch of that, which is coming up on the 12th; and of that, we had about 17 different states and jurisdictions that chose Walgreens as one of the providers to support, and we’re getting a subset of that allocation to start supporting in those 17 jurisdictions.
MEG TIRRELL: And so is it 170,000 for the first week, and do you expect that to be about the supply going forward?
RICK GATES: That’s a great question. I probably should have added that. I’m sorry. But, yeah, it will continue to move forward and increase over time. So we do believe that actually you’re going to see, as vaccine becomes more available, the federal pharmacy program will have more doses to be able to allocate across the pharmacies that are supporting this. And I think you’re going to see from Walgreens, we won’t just support in the 17 states. As it’s more available, you’ll see that start to open up much more broadly. It’s important to note that there are a couple of ways the vaccine is being allocated currently. One is through the federal program, which I think you’re hearing a lot about because that’s starting. But we’ve also been working very closely with states who have state allocations which actually are more, if you look at total allocations, than the federal program right now. And so we are working with about 16 states and jurisdictions, and we are supporting in those states, as well. So, all in all, I think that we’re just trying to understand how we can support the states, how we can support the federal government and do what we do best, which is really safely and efficiently give vaccines to Americans.
MEG TIRRELL: Let’s talk about some of the learnings that you’ve had through working with states, specifically on being in the communities. I want to ask you later about the long-term care facility program. But, you know, through that partnership on the local level, what learnings have there been in terms of administering COVID vaccines? How is it different from the other vaccine businesses you have, like flu?
RICK GATES: Yeah, I think the difference in the learnings that we have is that, just like flu, you have — every state may have different requirements or eligibility, or just who can do the vaccinations themselves, so we have to adjust how we operate based off of what the states require for, whether it’s flu, shingles, pneumonia, or all those types of vaccines. When it came to COVID, we had 64 different jurisdictions that may have different ways or different eligibility requirements, so you put on top of it patient subpopulations that are eligible at different times and different across all the different jurisdictions. And so that does create some complexity for us as a platform to really make sure that we can support that more broadly, and obviously try to accelerate that into what we’re doing. So a lot of the learnings are, you know, it’s changing on a daily basis and we have to be nimble to make sure that we can support it in the most efficient and safe manner.
MEG TIRRELL: Well, let’s talk about equity. You know, the White House COVID-19 response team just had a briefing about trying to get better equity in terms of who’s getting vaccines. If you look at the CDC demographics data, it’s really disproportionate in terms of more white people getting access to vaccines, people of color really not getting as much access, and the hope is that through the pharmacy program and then also through community health centers, which they just announced today, you will be able to reach more people of color in the communities where they live. So for Walgreens, you know, if you go to your website to sign up for a vaccine appointment and you’re in the eligible groups, is there a way for pharmacies to try to ensure you are serving the communities where you’re based? There’s no sort of, you know, proof of residence requirement or anything like that. So how can you ensure equity in who is getting these appointments?
RICK GATES: Yeah, I think it’s a great question. I think equity is absolutely something that is at the forefront of what we’re trying to do. You know, I think CDC also states that some — there’s interrelated issues as to what’s causing a challenge to vaccine equity, especially in communities of color. And that would be transportation and vaccine hesitancy. So I think a lot of what you’re seeing us do is really kind of have a 3-pronged approach to how we’re going to address vaccine hesitancy. One is access. So as the vaccine becomes more readily available, obviously, there are 9,000 points of care, many of which are in medically underserved areas, are going to be important for us. But we have to have different models, as well. You’re going to see us very aggressively going out and working on off-site clinics and in areas and partnerships so we can really take vaccine into underserved areas and communities of color to really bring that down or address that challenge. Second comes along the lines of vaccine hesitancy, and it’s got to just be how do we leverage our pharmacists, who are a trusted source of information, but also partnerships that we have locally. You know, our pharmacists not only work locally, they live locally, and I think it’s a lot of those relationships that are taking the information to say, how do we get this out there and really ensure that the community understands how a vaccine works, how safe it is, and that it’s something they should be looking for as well. And the third are the barriers that the communities of color are having to get vaccines, and that’s looking at transportation as the most prevalent one. Obviously, we announced our Uber relationship today, but we’re trying to understand how do we break down the barrier of transportation and make it easier for those that want to either get to our stores or get to off-sites or have access to vaccine much more available going forward as well. So I think there’s multiple approaches that we’re trying to do to make sure that we can get there. I think to get back to the other part of your first question, vaccine availability is probably the biggest hinderance right now. You know, it’s not widely available. I think when we get it, even with the federal program, we are putting those in most — more prevalently in stores in underserved communities to try to make sure it’s available in those communities so that they have access to vaccine. That’s what the federal program is really set to do, and we absolutely are following that with CDC to make sure we’re putting the vaccine in the right stores, as well.
MEG TIRRELL: Well, tell us about this Uber partnership that you just announced today. I mean, in some ways, it sounds really cool. You are setting up your appointment on the Walgreens website. You make appointments for both your first and your second dose, and then you have the ability to book an Uber to get to the appointment. Tell us first about how that works, and then I’ve got more questions for you about it.
RICK GATES: Sure, Meg. And I think — just in general, I think what we’re trying to do is to take down any challenges to transportation barriers that consumers may have. So I think that the premise up front is that, you know, there will be bidirectional information — not information, but ability to book transportation, if you will, through Uber platforms for those that may want to click through and get access to it as well. But I think the broader context is obviously Uber has made a commitment more broadly on 10 million rides that are going to be reduced and/or no fare for underserved areas, and obviously we’re working on bringing access of vaccine into that, as well. So the partnership really is tying together vaccine and vaccine hesitancy and information and education, as well as bringing ride and transportation together, as well. I think an important part of that is going to be how we actually partner in local communities to make sure that nonprofits and other partners that both Uber and Walgreens has, can really say these are the right types of populations to disseminate information around free rides and how do they get access to free rides to get to vaccines that are available to them.
MEG TIRRELL: And then, sort of more broadly, not just for the Uber partnership, but in general, how does Walgreens ensure that folks who might not have internet access or aren’t savvy with using a smartphone can make an appointment, figure out where to get a vaccine, and get to that appointment if they need help with it?
RICK GATES: It’s a great question. We are building across multiple fronts. Not only are we taking call centers so that we can actually support that, our local stores are able to actually book appointments for those consumers that they know and love and treat every single day. So we’re trying to make it multipronged, if you will. It’s not going to just be through our app, it’s not just going to be online. It’s going to be actually our pharmacists and technicians outreaching to the consumers that they know and love and they work with every day, to make sure that they understand that there is vaccine available and they can schedule appointments as well, and they will actually take care of scheduling appointments for them when they talk to them, as well. So there’s multiple ways that consumers can actually schedule appointments going forward.
MEG TIRRELL: Let’s talk about your long-term care facility program, as well. Both you and CVS were tapped to help with this program. You said now that you plan to get 100 percent of first shots done by mid February. Back at the JPMorgan Healthcare Conference January 13th, I think the goal for that had been January 25th. Is it running a little bit behind schedule? And there’s been a lot of criticisms that maybe Walgreens and CVS have been going slower than many hoped. Do you think that’s fair?
RICK GATES: You know, I would just say we’ve had a lot of learnings from the beginning. I think Operation Warp Speed and the government asked us to help. We absolutely said we would step up and help in any way, shape or form we could. I think if you looked early on, there were multiple reasons why it was a little bit slower than everybody thought. I think we’ve learned from there. States had to choose one of two vaccines was one thing. Obviously, they were available at different times, as well. You look at, obviously, there was hesitancy for residents as well as employees that work in long-term care facilities, as well. So some were waiting to see how those facilities that started early on reacted to it, and did they have a lot of callouts and those types of things, as well. You had different timings by which skilled nursing facilities and assisted living facilities were approved by states to be launched, as well. All of those were confounding factors which actually had a bit of a slower start to the program. But how we look at it is, over the first 30 days, we did about a million vaccines. Over the next ten days, we did our second million vaccines, and we’re up to almost 2.5 million vaccines now. There’s massive acceleration in the program itself. 100 percent of skilled nursing facilities, dose one clinics are done. Almost 90 percent of second dose clinics are already done in skilled nursing facilities, and we’re approaching 90 percent of assisted living facilities first dose clinics are done, as well. So we’re getting to the point where first shots in arms are done across the entire platform, not just skilled nursing facilities, which were the priority from all states from the get-go.
MEG TIRRELL: One thing we’ve heard from both folks at Walgreens and also the federal government is that there was an overcount of how many vaccine doses would actually be needed for this program. We’ve heard from you guys that you’re working on reallocating those doses with the states. You said hesitancy is one reason for that. Do you have any way to put numbers on how many more doses were allocated than actually were used?
RICK GATES: You know, I will say, and I think that’s an important point, you know, the hesitancy that we saw as well as how we were asked to supply vaccine needs back into Operation Warp Speed through their ordering system was based on bed count, and obviously the amount of doses, which is two doses per resident, as well as per employee, to get an estimated count, if you will. So obviously we went through that process, that order, for all of those that actually had chosen Walgreens as their provider. And then, as we started to go into these facilities, we were seeing vaccine hesitancy, particularly among those that work in these facilities, that was higher than we expected. So CDC actually published recently, we are seeing about 60 percent hesitancy for employees and about 20 percent hesitancy for those that are living in these facilities, as well. So that created an ask, if you will, for more vaccines than what was needed. So, as we started to see that that was an issue going forward, we did start to work back with states to understand that we had more vaccine than we needed for the program, and how did they want us to reallocate it; whether it was going to support 1B and 1C-type populations, or give back to the states so they could reallocate what they wanted, as well.
MEG TIRRELL: So up until — and currently, there are two vaccines available for COVID. Both require pretty intense cold chain requirements, Pfizer’s more so than Moderna’s. Both are two shots. We are expecting we could see the Johnson & Johnson vaccine on the market within a few weeks. Its FDA Advisory Committee meeting is February 26th. That’s a one-shot vaccine, can be stored in the fridge for at least three months. How much of a game changer will that be for places like Walgreens in administering these vaccines?
RICK GATES: You know, I would just say, regardless of the vaccines that are available, I think it’s great that we’re going to have additional vaccines so that we can start to get shots in arms. And I think how I look at the J&J vaccine, it is simpler, obviously. One dose, we don’t have to worry about scheduling second doses. Storage capability, all that stuff, we’ve done historically. I’m less concerned about that. I just think that we need more vaccine available so that we can actually accelerate what we’re doing to support all the communities that we’re in. A single dose — and obviously some of the stats that we’re seeing come back through, there are FDA studies showing the impact to hospitalizations. Obviously a reduction in the side effects and overall efficiency of these vaccines. I think it’s just good news for all of us that there’s going to be more vaccine available.
MEG TIRRELL: Well, I’m supposed to wrap, but I can’t leave you without asking you about your incoming CEO Roz Brewer. Are you expecting any major change in strategy with Roz coming in from Starbucks in the middle of this massive historic vaccine rollout? What can you tell us?
RICK GATES: I can just say that we are so excited to have Roz joining the company. Obviously, she’s finishing out her current role, but if you look at where she’s gone through transformative type changes, really customer-focused solutions that she’s put into market during massive times of change in the companies that she’s been in, we are more than excited for her to come on and really help us continue the evolution and really supercharge how we get customer-first solutions, advance in digital, and really be a platform, both digital and physical, to really support all the communities that we’re in. So we are beyond excited for Roz to be joining.
MEG TIRRELL: All right. Rick Gates, thank you so much for this fascinating conversation. Can’t wait to talk with you again as we start to see vaccines really open up to the public hopefully later in the spring. Thanks again.
RICK GATES: Thank you so much.