CVS Health promises nationwide next-day Rx delivery alongside earnings
WOONSOCKET, R.I. — CVS Pharmacy is making a big convenience push for its patients. Starting early next year, the retail division of CVS Health will be offering nationwide next-day prescription delivery, and it will be bringing same-day delivery to patients in select cities, with Manhattan’s same-day service kicking off on Dec. 4.
“Our goal is to meet the needs of our all of our customers wherever, however and whenever they want,” CVS Health executive vice president and CVS Pharmacy president Helena Foulkes said. “Providing same- and next-day options for delivery of medications is just another way we can help our patients get and stay healthy.”
The same-day delivery offering will include prescriptions and curated over-the-counter products that will be taken directly to patients, the company said. Following the Manhattan rollout, Miami, Boston, Philadelphia, San Francisco and Washington, D.C., will see the service unveiled in early 2018.
The announcement of the planned delivery services was by CVS Health president and CEO Larry Merlo alongside the company’s Q3 earnings. The quarter, ended Sept. 30, saw its retail and long-term care segment’s revenues decrease 2.7% to roughly $19.6 billion, with an overall decline in same-store sales of 3.2%. Broken down, same-store sales declined 3.4% in the pharmacy and 2.8% in the front end. The company pointed to recent generic introductions, as well as an increase in generic dispensing rate, as part of the 435-basis point hit the pharmacy took in Q3.
CVS Health also saw a $55 million impact from the summer’s hurricanes. The costs were primarily focused on covering insurance deductibles, the company noted, adding that over the course of the quarter, it closed 925 of its stores for some period of time, with 11 stores still closed. As part of its philanthropy efforts, the company raised or donated $10 million in cash, products and supplies for impacted communities.
Despite the slight decline in retail and LTC for the quarter, CVS Health’s pharmacy services division saw revenues increase 8.1% to $32.9 billion, which it said was driven by an increase in pharmacy network claim volume, inflation in branded generics and more specialty pharmacy volume — all of which was slightly offset by generic dispensing increases. The company said it processed 374.1 million claims in Q3, marking an 8.3% increase over the previous year’s Q3.
These pharmacy services segment results seem poised to continue, as the company during the quarter inked a deal with Anthem to support the insurer’s new pharmacy benefits manager IngenioRx and launched a new 30,000-store performance-based pharmacy network that will be anchored by CVS Pharmacy and Walgreens, alongside 10,000 independent pharmacies. The aim of the pharmacy network is to drive cost savings through formulary compliance, CVS Health’s Q3 presentation slides noted. As it moves forward, CVS Health said its goal would be to partner with all payers to increase its volume and share.
“The solid third quarter results we posted today keep us well on track to achieve our full-year targets,” Merlo said. “While operating profit in the retail/LTC segment was impacted by the devastating hurricanes, operating profit in the pharmacy services segment was in line with expectations. At the same time, we continued to deliver substantial free cash flow and return significant value to our shareholders through dividends and share repurchases.”
The company closed the quarter with more than 9,200 pharmacy locations, 1,100 walk-in clinics.