Lupin 2023

CVS Caremark honored for expanding scope of Rx

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WOONSOCKET, R.I. — For almost a decade, CVS Caremark Corp. has been synonymous with the drive to expand the boundaries of community pharmacy.

From the time of the CVS drug chain’s merger with Caremark, one of the nation’s biggest pharmacy benefits managers, in 2007, through the introduction of such ground-breaking programs as Maintenance Choice and Pharmacy Advisor, to the new joint venture with Cardinal Health, the company has transformed the practice and business of retail pharmacy.

In recognition of its ongoing contributions to the profession and the larger health care system, Chain Drug Review has named CVS Caremark its Pharmacy Innovator of the Year.

The objective behind all of the company’s efforts is to extend the continuum of pharmacy care and, in so doing, improve patient access, enhance outcomes and help lower the overall cost of health care.

“We continue to believe in, and execute against, our purpose, to help people on their path to better health,” says president and chief executive officer Larry Merlo. “Our strategy of reinventing pharmacy is the key enabler to accomplish that.

“Health care is now going through a period of intense change,” he says. “We believe that our enterprise model can and will continue to deliver services and capabilities that would be difficult for a stand-alone competitor to offer on its own.”

During Merlo’s almost three years as CEO, CVS Caremark has had increasing success creating synergies between its diverse operations, which, in addition to the drug chain and PBM, include MinuteClinic. The result is an offering that is greater than the sum of its parts.



“We’ve been able to differentiate ourselves by bringing innovative products and services into the marketplace, including Maintenance Choice and Pharmacy Advisor have been shown to make a real difference for patients and payers. Our task is to quantify the benefits that those programs and products and services deliver in terms of improving medication adherence for patients and reducing the overall cost of care. So we continue to be laser focused on those goals, and we think that there are many more opportunities for us to continue to bring innovation into the marketplace.”

CVS Caremark’s acquisition of Coram LLC, a specialty infusion provider, from Apria Healthcare Group in late November illustrates its determination to capitalize on those opportunities. The $2.1 billion deal extends the company’s reach in the booming specialty pharmacy sector, instantly making it a leading provider of infused therapies and enteral nutrition in the home or ambulatory setting. Coram currently serves more than 20,000 patients a month.

“Infusion is an important component of having a comprehensive specialty pharmacy offering, and the acquisition is consistent with our strategy of investing in our core businesses that help to drive growth,” says Merlo. “The home infusion market today is estimated at right around $11 billion, with an annual growth rate of just under 10%. That growth rate is expected to accelerate, given that specialty infusion drugs will account for the majority of new products in the pharma pipeline over the next several years.

“Our approach to specialty pharmacy is to bring the most complete set of services to clients and patients, including new and innovative approaches to improve the management of costs that are covered by either the pharmacy benefit or the medical benefit. This deal is very consistent with our three goals around access, quality and cost.”

"Health care is now going through a period of intense change. We believe that our enterprise model can and will continue to deliver services and capabilities that would be difficult for a stand-alone competitor to offer on its own."

— Larry Merlo, president
and CEO

The purchase of Coram adds another dimension to CVS Caremark’s robust capabilities in specialty pharmacy, where it is the nation’s second-largest provider. That standing leaves the company well positioned to benefit from the growth of a sector where sales are expected to quadruple to more than $400 billion a year by 2020, according to CVS Caremark research released in November.

“When the subject of specialty pharmacy comes up, a lot of people tend to think of where the drug is administered or if the drug is provided to the patient through a mail-order facility,” Merlo notes. “While that’s part of the equation, we know that specialty is much more than that, and providers have to recognize the complex challenges those patients are dealing with. There is certainly a clinical component in terms of managing those patients’ health, and it can be quite complex, and there are also administrative and billing components associated with it.

“I recently heard the analogy that to be an effective specialty pharmacy provider, you have to be a triathlete. You can’t just be good at one thing; you’ve got to be good at multiple things. That’s what we’re trying to do.”

CVS Caremark is poised to bring its prowess in specialty pharmacy to bear on what goes on in its drug stores. Specialty Connect, which has been field tested for the better part of a year, will be rolled out more broadly in the first quarter, giving CVS/pharmacy shoppers easy access to services administered by the PBM.

“Specialty Connect really enables patients to engage with their local CVS pharmacists and, at the same time, access the extensive support services available through the CVS Caremark specialty pharmacy network,” explains Merlo. “Expert care gets provided by the neighborhood pharmacist in conjunction with specialty care teams. They will work with the patient to make sure they are adherent with their medications, work to prevent side effects and monitor outcomes, as well as assist with prior authorizations and benefit verification.

“We can also coordinate with the care management nurses to address nonpharmacy issues related to a patient’s condition, and we can offer them the convenience of ensuring that their prescriptions are available in an easily accessible and timely fashion through their CVS/pharmacy store.”

The early response to Specialty Connect has been enthusiastic. Patients, caregivers and providers have all realized benefits from the program.

“We have found a high degree of satisfaction. Patients like being able to go to their local CVS as opposed to doing everything by phone or on the Internet,” Merlo says. “It speaks to the accessibility goal.

“And physicians have embraced the fact that we’ve been able to coordinate care so that these patients can start taking their medications more quickly. We’ve demystified some of the prior authorization and benefit verification that is required behind the scenes.”

Another change coming to many CVS/pharmacy locations is the addition of a walk-in health clinic for the treatment of routine conditions and supplementary care targeted to an expanding range of chronic health problems. Operated by MinuteClinic, which was acquired by CVS in 2006, the network of clinics, which are staffed by nurse practitioners, now stands at some 800 locations. Many of them are affiliated with 30 physicians groups and health systems, including such prestigious institutions as Emory Healthcare, the Cleveland Clinic and the UCLA Health System. The number of MinuteClinics will grow to 1,500 by 2017.

“Increasingly, the site of care can determine the cost of care,” says Merlo. “When a nurse practitioner at a MinuteClinic sees a patient about a sore throat or an ear infection, versus the same diagnosis being performed in an urgent care center or an emergency room, that contributes to reducing the overall cost of care without compromising the quality of that care.

“More and more payers understand that. When MinuteClinic, about 20% of all patients had some type of co-pay; today that number’s approaching 90%. So payers are seeing the role that MinuteClinic plays around both quality and cost, and the role that we can play as part of an integrated team in terms of triaging patients. Many of the patients that we see are referred to our partners for more comprehensive evaluation and care.

“That’s going to go a long way toward ensuring continuity of care, and at the same time reducing some of the duplication that exists today.”

The fruition of CVS Caremark’s multipronged strategy comes at a propitious moment. With the rollout of the Affordable Care Act, some 30 million Americans are expected to join the ranks of the insured over the next several years. That, coupled with the worsening shortage of primary care physicians, will accelerate the transformation of the drug store into a neighborhood health care center. The evolution is also the culmination of a vision that Merlo, who was trained as a pharmacist at the University of Pittsburgh, and his peers had many years ago.

“I can remember my professors talking about this 35 years ago,” he recalls. “Most of them believed that the clinical element associated with pharmacy could only be delivered in a clinical setting, which was defined as the hospital.

“Many of those services are now being delivered at CVS/pharmacy. The role of the pharmacist as the most accessible, trusted health care professional has remained steadfast. What’s changed over time is our ability to provide pharmacists the information and the technology they need to be more of a clinician in a community setting.”


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