WSL Future of Health Event

CVS aims to be ‘partner of choice’ in health care

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NEW YORK — CVS Health’s delivery of value to health care stakeholders makes it a “partner of choice,” president and chief executive officer Larry Merlo said at the company’s Analyst Day.

Notwithstanding all the changes occurring in health care, success will be determined by the ability to make care more affordable, accessible and effective, he said. “And we remain confident that CVS Health is well positioned to deliver on all three.”

“We continue to have the most extensive suite of enterprise assets,” added Merlo. “On a standalone basis, each one would be market leading. Yet what really sets them apart is our ability, largely through technology, to integrate pharmacy care from the payor to the provider to the patient.”

Borrowing a colloquial phrase widely used in telecommunications, Merlo said CVS owns “the last mile of service” in health care delivery. “If you think about all of our enterprise assets, each one delivers care directly to the health care consumer. And keep in mind that retail pharmacy is quite often the front door to health care, with the highest frequency of patient interaction. The face-to-face interactions between patients and our 30,000 pharmacists and clinicians provide us with an unmatched ability to help change consumer behavior and drive better health outcomes at a lower cost. With increasing consumerism and what we call the ‘retailization’ of health care, improving clinical outcomes and patient satisfaction is of significant value to our health care partners.”

Executive vice president and chief financial officer Dave Denton praised the company’s recent financial performance. He said that strong earnings growth, solid working capital management, disciplined capital investments and sound debt management over the past three years have enabled it to generate a significant amount of cash for enhancing shareholder value. “We have a proven track record of success in meeting our long-term growth targets, and we are targeting, on average, 10% growth in adjusted EPS longer term. We also expect $7 billion to $8 billion of cash to be available annually for enhancing shareholder value.”

“Given the recent changes in the marketplace and our outlook for 2017, we have put a plan in place to return to more robust levels of growth,” Denton added. “One element of this plan relates to our multiyear enterprise streamlining initiative, which aims to further improve productivity and to solidify the company’s low-cost provider status. We expect to deliver approximately $700 million to $750 million in annual savings across the enterprise by 2021, with cumulative savings of nearly $3 billion over the next five years. This will also free up capital for strategic investments that can help drive the continued growth and success of the enterprise.”

CVS Caremark president Jon Roberts said it continues to be the PBM of choice, pointing to another successful selling season and continual innovation to meet the latest health care ­challenges.

Dr. Alan Lotvin, executive vice president of CVS Specialty, discussed how the unique integrated PBM-specialty model is best positioned to meet the diverse and complex needs of patients, payers and providers.

Helena Foulkes, president of CVS Pharmacy, outlined how the retail pharmacy business can be the best partner for PBMs and health plans by leveraging the company’s enterprise assets and offering a menu of bundled services providing significant value to payers. She also highlighted growth strategies for the front store, long-term care pharmacy and MinuteClinic businesses.


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