Dec 13 CVS Caremark Corp is looking at
changes in U.S. healthcare as an opportunity to serve more
customers, whether they are picking up prescriptions, getting
them through the mail, or stopping by an in-house MinuteClinic
for a checkup.
The company, formed when drugstore chain CVS bought pharmacy
benefits manager Caremark in 2007 in a $27 billion all-stock
deal, is set to give details on its strategy as it meets with
analysts and investors in New York on Thursday. It also plans to
discuss its 2013 financial forecasts.
The coming year stands to be a busy one for the healthcare
sector as the United States prepares for 30 million people to
join the ranks of insured patients under the Affordable Care
Act, or Obamacare, starting in 2014. At the same time, the large
population of aging baby boomers and rising demand for specialty
drugs stand to be opportunities for companies such as CVS.
The industry is already seeing rapid growth in the number of
people signing up for Medicare Part D prescription plans.
"You've got 10,000 baby boomers becoming eligible for
Medicare every day now," CVS Chief Executive Larry Merlo said,
referring to the health insurance plan for seniors. "The change
is upon us and it will evolve over the next several years."
Merlo asserts that CVS can play a bigger role in getting
patients with chronic conditions to stick to their drug
regimens, which can save billions of dollars.
About half of Americans suffer from one or more chronic
diseases and of those who are newly diagnosed with a chronic
disease, such as diabetes, almost 50 percent failed to stick
with their drug regimen in the first year, Merlo said.
"The lack of medication adherence is costing our healthcare
system some $300 billion a year in unnecessary costs," he said.
While CVS prepares for next year, its main competitors have
come under pressure.
Drugstore leader Walgreen Co is trying to lure
patients back to its stores after reaching a new contract with
Express Scripts Holding Co, CVS Caremark's largest
competitor in the pharmacy benefits manager business (PBM).
In November, Express Scripts said that its business would
come under pressure in the weak economy, leaving analysts to
question that company's strategy in the wake of its acquisition
of another PBM, Medco Health Solutions.
Merlo declined to comment on whether CVS's strategy would
include any acquisitions, though "bolt-on" acquisitions to
support its retail or PBM units are always being reviewed.
CVS also runs roughly 650 MinuteClinic health care clinics,
which have seen more patients come in. The day after
Thanksgiving was the clinics' busiest day to date, with 19,000
visits on Nov. 23. CVS expects more than 3 million visits to
MinuteClinic in 2012.
Eight of the more than 7,400 CVS stores remain closed after
being significantly damaged by Hurricane Sandy. Six should
reopen by the end of 2012 and the rest may reopen by the end of
the first quarter of 2013, Merlo said.
CVS already said that costs associated with the massive
storm would reduce its fourth-quarter earnings by as much as 1
cent per share.
Its third-quarter profit came in a penny ahead of analysts'
expectations, with growth in both the pharmacy benefits
management business and the drugstore chain.