Retail News Breaks
CVS Caremark names new PBM president
December 21st, 2009
WOONSOCKET, R.I. – Per Lofberg, president and chief executive officer of Generation Health Inc., has been appointed president of CVS Caremark Corp.'s pharmacy benefit management business.
Plans call for Lofberg to start in the position on January 4, CVS Caremark said Monday. He fills the post vacated by Howard McLure, who retired late last month. Chairman and CEO Tom Ryan had assumed the PBM duties while the company searched for a successor to McLure.
CVS Caremark also announced Monday that it has boosted its investment in Generation Health, a genetics benefit management firm. Early last month, the companies unveiled a strategic partnership to expand pharmacogenomic (PGx) clinical and testing services for CVS Caremark PBM clients to improve care for patients who are nonresponsive to their medications or have adverse reactions.
Lofberg has more than 30 years experience in health care and the PBM industry, including as chairman of Merck-Medco Managed Care LLC, which later became Medco Health Solutions.
"CVS Caremark's corporate resources and its leadership position as the country's largest provider of pharmacy services offers a tremendous platform for innovation and growth in our complex and challenging health care system," Lofberg said in a statement.
Before launching Generation Health, Lofberg was co-founder and CEO of Merck Capital Ventures. He also spent 15 years at Boston Consulting Group and served as partner-in-charge of BCG's New York office and headed the company's global health care practice.
"Per is widely respected in the PBM and health care industry. He brings a wealth of experience in working with key clients to understand the needs of the marketplace and produce meaningful results," Ryan commented. "His expertise, along with his demonstrated ability to execute growth strategies, makes him the perfect person to guide our PBM in the evolving health care environment."
Ryan had announced McLure's retirement in a conference call with financial analysts about CVS Caremark's third-quarter results. During the call, Ryan forecast disappointing results for its PBM next year, based on the loss of a net of $4.8 billion in contracts, and said its 2010 operating profit is expected to drop as much as 10% to 12%. The news triggered a roughly 20% one-day drop in CVS Caremark's stock price.
Analysts recently said that one of the keys for CVS Caremark in getting the PBM business back on track was to find a replacement for McLure quickly so the company could again concentrate on landing more accounts.
"One thing that will be absolutely imperative for the company to resolve is the leadership situation around the PBM business," J.P. Morgan analyst Lisa Gill wrote in a research note last month. "With Howard McLure retiring, CVS Caremark needs to bring in a new leader in place as soon as possible. We think a new hire needs to be in place by January at the latest so this individual can implement the overall strategy and marketing message ahead of the larger RFPs that will go out in February/March and enable the company to participate effectively in the 2011 selling season."
Ryan also said during the conference call that Len Greer, the newly hired PBM senior vice president of marketing, will also help hone CVS Caremark’s PBM message. Greer joined the company from health management provider ActiveHealth, taking over responsibility for PBM marketing from Jack Bruner, who is transitioning to the new role of executive vice president of strategic development.
Meanwhile, CVS Caremark said that the increased investment in Generation Health reflects its aim to further strengthen its work on applying pharmacogenomic medicine to its benefit management product suite.
Financial details of the investment weren't disclosed. With the move, Generation Health will continue to operate as an independent business from CVS Caremark, offering a full range of genetic benefit management services to health care payors, according to the company. CVS Caremark said it will have financial and strategic ties to Generation Health and be represented on its board of directors.
Co-founder Rick Schatzberg will become Generation Health's president and CEO and serve as a board member, replacing Lofberg, who will continue to serve on Generation Health's board.
CVS Caremark said the pharmacogenomic clinical services resulting from the partnership are slated to be introduced to PBM clients in the second quarter of 2010.
"With this additional investment in Generation Health, we are accelerating our commitment to personalized medicine and making genomic benefit management an integral part of our PBM offering," Ryan said in a statement. "We believe there will be a growing opportunity to tailor pharmaceutical treatment to patients based on genetic patterns. This investment expands our clinical capabilities to improve pharmacy health care and is consistent with our integrated approach to help save payors and patients time and money while improving health outcomes."
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