CVS Health’s pharmacy care assets position the company well for growth, even in an evolving health care arena set for further change under a new presidential administration, executive VP and CFO Dave Denton said.
In an interview posted this week on investment intelligence website Advisor Access, Denton outlined CVS’ strengths — namely, its integrated retail pharmacy, PBM, specialty pharmacy and in-store clinic businesses — and gave his take on issues of the day in the health care and pharmacy marketplaces.
“As the health care market continues to evolve, health care stakeholders are placing increased emphasis on making care more affordable, accessible and effective. We believe no other company has the full suite of assets to deliver on each of these objectives,” Denton told Advisor Access. “We’ve built the capabilities to integrate pharmacy care from the payer to the provider to the patient.”
For example, CVS aims to step up efforts to partner with other PBMs and health plans. “We have begun to offer a menu of services to other PBMs and health plans as well — exclusive capabilities such as MinuteClinic services, infusion and long-term care capabilities — as a component of the CVS Pharmacy value proposition,” he said.
One of the stars of CVS’ integrated care has been its Maintenance Choice program, which leverages its retail drug store and PBM units. Denton reports that the next version of the program, which he dubbed Maintenance Choice 3.0, is now being piloted. “This iteration offers a new level of convenience for pharmacy patients, giving them the option of having prescriptions delivered to their home or office within two to three hours,” he said in the Q&A.
Among CVS’ recent acquisitions, Target’s pharmacy business is progressing nicely, according to Denton. “As we enter 2017, we are seeing prescription volumes growth improve quarter to quarter since we successfully completed the integration last summer,” he explained to Advisor Access. “This has been driven largely by the strength of our patient care programs and the increased adoption of our unique adherence programs, such as Maintenance Choice. We continue to invest in these programs, as well as our outreach campaigns, to attract more Target guests and create new CVS Pharmacy patients.”
On the hot-button issue of soaring prescription drug prices, Denton said PBMs have gotten a bad rap. “Some of the recent commentary circulating in the market has suggested that pharmacy benefit managers, or PBMs, are the cause of these rising prices. These suggestions are erroneous, as PBMs like CVS are the solution, not the problem,” he said.
PBMs have helped ease the impact of drug price hikes, Denton pointed out. “PBM cost management tools have allowed us to keep our clients’ drug trend — a measure of the annual increase in prescription drug costs and utilization — to a mere 3.2% increase in 2016. This compares to an unmanaged trend of 11%,” he told Advisor Access. “Although manufacturers continue to attempt to push price increases through the supply chain, we have been very successful at mitigating these increases through our cost management solutions.”
Advisor Access described U.S. health care reform as a “moving target” under the fledgling Trump administration. Yet CVS’ assets and strategy give it the flexibility to adapt to whatever changes may transpire, according to Denton.
“There is a lot of rhetoric around the repeal of the Affordable Care Act and the potential legislation that would replace it, but at this point it’s difficult to comment on how the various scenarios will play out,” he said in the Q&A. “No matter what happens, we believe the need for cost-effective care for all Americans will remain. And we are well-positioned to pivot to address any potential policy changes and to continue to play a meaningful role in reducing overall health care costs while improving patient care.”