Walgreens to cut costs sharply

Walgreens Boots Alliance on Thursday unveiled a plan to save $1 billion a year within three years - an effort it expects to lead to significant restructuring and other charges.

The plan was released as its shares declined on the heels of mediocre quarterly results.

Walgreens' plan is intended to save $1 billion a year within three years - an effort it expects to lead to significant restructuring and other charges.

Walgreens faces pressure on numerous fronts. Competitor CVS Health bought insurer Aetna last month and plans to add new health services in its stores.

And digitally focused competitors are entering the pharmacy market, including a batch of small venture-backed start-ups and online behemoth Amazon.com.

The pharmacy chain is trying to get ahead of these competitive threats with several collaborations, including a new partnership with an Alphabet Inc. unit on health projects.

It is testing out new beauty spaces with products from Birchbox in some stores. In others, it is piloting senior-focused clinics with insurer Humana.

Earlier this month, Walgreens said it will start nationwide next-day prescription delivery.

Many of the collaborations are in the early stages, however, and Walgreens is a long way from turning its stores into health care hubs.

'It will take years” to transform the stores, CEO Stefano Pessina said on a call with analysts. 'Whether this will be three or five is difficult to say because many of these tests take a lot of time to come to a real fruition.”

Walgreens and health insurer Humana have been reported to be in early talks about taking equity stakes in one another. Neither company has confirmed the talks.