When Larry Merlo became chief executive officer of CVS Caremark Corp. last month he made it clear that his top priority is to realize the full potential of the integrated pharmacy care model that has decisively shaped the evolution of the company in recent years.


CVS Caremark, integrated pharmacy care model, Helena Foulkes, Larry Merlo, Jeffrey Woldt, pharmacy benefits management, PBM, health care reform, health care, enterprise branding, health care delivery, CVS, Caremark, PBM, Tom Ryan, Mac Crawford, health care costs, ExtraCare, Maintenance Choice, Pharmacy Advisor, adherence, prescriptions, MinuteClinic








































































































































































































































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Inside This Issue - Opinion

CVS Caremark aims to heighten impact on Rx

April 11th, 2011

When Larry Merlo became chief executive officer of CVS Caremark Corp. last month he made it clear that his top priority is to realize the full potential of the integrated pharmacy care model that has decisively shaped the evolution of the company in recent years.

With the appointment of Helena Foulkes as chief health care strategy and marketing officer, Merlo has signaled that he intends to move quickly to heighten the impact of CVS Caremark’s extensive retail and pharmacy benefits management assets.

In the newly created post Foulkes, who is also an executive vice president, is charged with more closely integrating various strands of the company’s activities — health care reform strategy, government relations, marketing, communications and enterprise branding among them — to enhance CVS Caremark’s ability to meet the needs of patients and payers, augment partnerships, and improve financial results.

The coordinated approach is a welcome development, one that should help the company achieve its objectives more rapidly and contribute to a paradigm shift in health care delivery. Since the $26 billion merger of CVS and Caremark in 2007 perceptions — both outside and within the organization — have not always been in sync with the strategic vision that brought the company together.

Prior to the deal people were accustomed to thinking about a drug chain and a PBM as two distinct entities. Tom Ryan, Merlo’s predecessor as CEO and current chairman, and Mac Crawford, his counterpart at Caremark, saw an opportunity to extend the continuum of care and, in the process, improve ­patient outcomes and limit overall health care costs. Four years later many have still not been convinced.

It will be Foulkes’ job to change their thinking. She is well equipped for the task. During the course of her 19-year career at CVS Foulkes has worked on both the retail and PBM sides of the business. Her most significant accomplishments include spearheading the introduction of CVS/pharmacy’s industry-leading ExtraCare customer loyalty program; Maintenance Choice, which helps PBM clients save money on 90-day prescriptions and lets members chose the most convenient way to receive their medications; and Pharmacy Advisor, a PBM program designed to improve adherence, close gaps in care and manage expenditures.

In crafting a narrative for a variety of audiences, including consumers, insurers, government officials and other health care providers, Foulkes can draw on CVS Caremark’s diverse strengths. The company is the second-largest community pharmacy operator in the country — whose only serious rivals in that sector are Walgreen Co. and Walmart — and the No. 2 PBM, behind Medco Health Solutions Inc.

The breadth and depth of those offerings, which include MinuteClinic, one of the biggest networks of in-store health clinics, put CVS Caremark in a unique position in a marketplace that appears, for the moment at least, to be on course to undergo changes that should create an environment more conducive to what CVS Caremark is trying to ­accomplish.

With implementation of health care reform proceeding, even as legal and legislative challenges continue, it’s incumbent on Merlo, Foulkes and their colleagues to knock down whatever silos remain within the organization and go about the business of developing hard evidence to support the proposition that taking a more unified approach to pharmacy care will yield tangible benefits for everyone involved.

The company continues to conduct research (most recently a report that shows prescriptions with a “dispense as written” designation may result in $7.7 billion in annual health care costs) that supports its position. Now it must mold the evidence into a compelling case that can win over the skeptics.

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