IBM and Walgreens both bought their way into healthcare. Both sold.

Two big companies tried to buy their way into healthcare. Both paid billions. Both ended up selling.

In April 2015, IBM launched Watson Health: own the world's clinical data and point a learning machine at it. In 2020, Walgreens put $1 billion into the primary-care operator VillageMD, to put a doctor and the prescription under one roof.

IBM bought Merge Healthcare for $1 billion and Truven Health Analytics for $2.6 billion, more than $4 billion in health data assets in roughly a year. Walgreens added $5.2 billion in 2021 for a 63% majority stake in VillageMD.

Then the products met reality. MD Anderson halted its Watson oncology project after spending $62 million. In September 2016, IBM declared internally that its Oncology Expert Advisor was not ready for human investigational or clinical use.

At Walgreens, the U.S. Healthcare division lost $1.73 billion in 2023 alone. In fiscal 2024, Walgreens took a $12.4 billion goodwill impairment on VillageMD and planned to shut 160 clinics.

IBM sold its health data and analytics assets in 2022, for $1.065 billion in cash. In August 2025, Sycamore Partners took Walgreens private at $11.45 per share, about $10 billion in total, with VillageMD carved off to be sold separately.

Both scaled the story before the business proved itself. IBM ran market, then product, then validate. Two cases are not a law. But if your bet needs a new kind of business to work, prove it small before you buy it big.