“Today’s announcement is a shot of positive news for CVS, following the disclosure earlier this month that CVS would lose roughly 40 million retail scripts (annualized) after being excluded from certain pharmacy networks (beginning Dec. 1, 2016),” Mushkin wrote Tuesday in a research note titled “CVS Fires Back.”

“While this business is likely lower margin, we believe CVS has a strong management team, and this morning’s release highlights the company’s willingness to fire back at recent competitive actions and win back volume,” he said.

Walgreens Boots Alliance has made strides in promoting restricted pharmacy networks, Mushkin noted. Indeed, WBA has locked up a swath of prescription market share through its recent partnerships with OptumRx, Prime Therapeutics and Tricare (where it nudged out CVS as the network pharmacy provider).

“We continue to believe that CVS has some work to do to quell skepticism in its vertical PBM/retail business, given some of the recent marketplace changes that appear to be favoring competitors,” Mushkin explained in his report. “Better financial performance in the coming years, in our opinion, hinges to a degree on the CVS’ ability to continue to show the value of its vertical PBM/retail model.”

That value has been “well demonstrated” in CVS Caremark’s commercial business, in which more than half of prescriptions processed are filled at company-owned facilities,” he said.

“In Caremark’s health care customer base, which has accounted for the lion’s share of new business, CVS has seen much slower success in up-selling its unique offerings like Maintenance Choice that leverage its model and that help drive financial performance,” Mushkin added. “Success with these efforts will go a long way in quelling fears about its model, and we hope to hear more about management’s plans in this area at the company’s Analyst Day on Dec. 15.”