CVS Health Corp
Summary
- CVS Health is the leading health solutions company providing health solutions to communities across America.
- The Company has more than 9,900 retail locations, nearly 1,200 walk-in medical clinics
- The company has over 300,000 dedicated colleagues including more than 40,000 physicians, pharmacists, nurses and nurse practitioners.
- CVS Health recently acquired Signify Health and Oak Street Health.
CVS Health Corp (NYSE:CVS, LSE: 0HRS) is the leading health solutions company providing health solutions to communities across America through its local presence, digital channels and over 300,000 dedicated colleagues including more than 40,000 physicians, pharmacists, nurses and nurse practitioners. The Company has more than 9,900 retail locations and 1,200 walk-in medical clinics.
Recent Developments
CVS Health completes acquisition of Oak Street Health1
May 2, 2023; CVS Health announced it has completed its acquisition of Oak Street Health.
The acquisition will broaden CVS Health’s value-based primary care platform and significantly benefit patients’ long-term health by improving outcomes and reducing costs – particularly for those in underserved communities.
Earlier in the year CVS Health announced it entered into a definitive agreement to acquire Oak Street Health in an all-cash transaction for $39 per share, representing an enterprise value of approximately $10.6 billion. The company financed the transaction with borrowings of $5.0 billion from a term loan agreement entered into on May 1, 2023, and existing cash and available resources. CVS Health is committed to maintaining its current credit ratings.
Oak Street Health will continue to operate as a multi-payor primary care provider as part of CVS Health.
CVS Health completes acquisition of Signify Health2
March 29, 2023 — CVS Health announced that it has completed its acquisition of Signify Health.
Signify Health is a leading technology and services company, focused on provider enablement and bringing clinicians into the home to identify chronic conditions, close gaps in care, and address social determinants of health. Signify has a network of more than 10,000 clinicians in all 50 states, who spend an average of 2.5 times longer with a member during home visits than an average visit with a primary care provider.
The combined company will work to improve care delivery capabilities, lower costs, improve levels of engagement and enable broad access to high-quality care, especially for Medicare Advantage customers. Signify clinicians can have an even greater impact by engaging with CVS Health's unique collection of assets and connecting consumers to care how and when they need it.
Under the terms of the transaction, each outstanding share of Signify Health common stock is being exchanged for $30.50 in cash, representing a total transaction value of approximately $8 billion. CVS Health funded the transaction price with existing cash and available resources and is committed to maintaining its current credit ratings.
Financial Highlights
First Quarter 2023 Results
May 3, 2023; CVS Health Corporation announced operating results for the three months ended March 31, 2023.3
Total revenues increased to $85.3 billion, up 11.0% compared to prior year
GAAP diluted EPS of $1.65 and Adjusted EPS of $2.20
Generated cash flow from operations of $7.4 billion
Operating income decreased 2.8% primarily due to the write-down of the Company’s Omnicare® long-term care business (“LTC business”), the decrease in adjusted operating income described below and an increase in acquisition-related transaction and integration costs compared to the prior year. The decrease in operating income was partially offset by the absence of a $484 million opioid litigation charge recorded in the prior year and a decrease in amortization of intangible assets compared to the prior year.
Interest expense remained relatively consistent, increasing to $589 million from $586 million.
Effective for the first quarter of 2023, the Company realigned the composition of its segments to correspond with changes made to its operating model and how the business is managed. As a result of this realignment, the Company formed a new Health Services segment, which in addition to providing a full range of pharmacy benefit management (“PBM”) solutions, also delivers health care services in the Company’s medical clinics, virtually, and in the home, as well as provider enablement solutions. In addition, the Company created a new Pharmacy & Consumer Wellness segment, which includes its retail and long-term care pharmacy operations and related pharmacy services, as well as its retail front store operations. This segment will also provide pharmacy fulfillment services to support the Health Services segment’s specialty and mail order pharmacy offerings. The Company also discontinued its former segment reporting practice for activity under its Maintenance Choice® program as described within the supplemental information beginning on page 15. Following this segment realignment, the Company’s four reportable segments are: Health Care Benefits, Health Services, Pharmacy & Consumer Wellness and Corporate/Other.
Effective January 1, 2023, the Company adopted a new accounting standard related to the accounting for long- duration insurance contracts using a modified retrospective transition method.
Company Overview
CVS Health Corporation is a leading diversified health solutions company. The Company has more than 9,900 retail locations, nearly 1,200 walk-in medical clinics and with approximately 110 million plan members. The company expanding specialty pharmacy solutions and a dedicated senior pharmacy care business serving more than one million patients per year.
Business Segments
The Company has four reportable segments: Health Care Benefits, Pharmacy Services, Retail/LTC and Corporate/Other.
Health Care Benefits Segment
The Health Care Benefits segment operates as one of the nation’s leading diversified health care benefits providers, serving an estimated 35 million people as of December 31, 2022. The Health Care Benefits segment has the information and resources to help members, in consultation with their health care professionals, make more informed decisions about their health care. The Health Care Benefits segment offers a broad range of traditional, voluntary and consumer-directed health insurance products and related services, including medical, pharmacy, dental and behavioral health plans, medical management capabilities, Medicare Advantage and Medicare Supplement plans, PDPs, Medicaid health care management services, and health information technology (“HIT”) products and services. The Health Care Benefits segment also provided workers’ compensation administrative services through its Coventry Health Care Workers’ Compensation business.
Pharmacy Services Segment
The Pharmacy Services segment provides a full range of PBM solutions, including plan design offerings and administration, formulary management, retail pharmacy network management services and mail order pharmacy. In addition, through the Pharmacy Services segment, the Company provides specialty pharmacy and infusion services, clinical services, disease management services, medical spend management and pharmacy and/or other administrative services for providers and federal 340B drug pricing program covered entities (“Covered Entities”). The Company operates a group purchasing organization that negotiates pricing for the purchase of pharmaceuticals and rebates with pharmaceutical manufacturers on behalf of its participants. The Company also provides various administrative, management and reporting services to pharmaceutical manufacturers. The Pharmacy Services segment’s clients are primarily employers, insurance companies, unions, government employee groups, health plans, PDPs, Medicaid managed care (“Managed Medicaid”) plans, plans offered on Insurance Exchanges and other sponsors of health benefit plans throughout the United States and Covered Entities. The Pharmacy Services segment operates retail specialty pharmacy stores, specialty mail order pharmacies, mail order dispensing pharmacies, compounding pharmacies and branches for infusion and enteral nutrition services. During the year ended December 31, 2022, the Company’s PBM filled or managed 2.3 billion prescriptions on a 30-day equivalent basis.
Retail/LTC Segment
The Retail/LTC segment sells prescription drugs and a wide assortment of health and wellness products and general merchandise, provides health care services through its MinuteClinic walk-in medical clinics, provides medical diagnostic testing, administers vaccinations for illnesses such as influenza, COVID-19 and shingles and conducts long-term care pharmacy (“LTC”) operations, which distribute prescription drugs and provide related pharmacy consulting and other ancillary services to long-term care facilities and other care settings. As of December 31, 2022, the Retail/LTC segment operated more than 9,000 retail locations, more than 1,100 MinuteClinic locations as well as online retail pharmacy websites, LTC pharmacies and on-site pharmacies. During the year ended December 31, 2022, the Retail/LTC segment filled 1.6 billion prescriptions on a 30-day equivalent basis. For the year ended December 31, 2022, the Company dispensed approximately 26.8% of the total retail pharmacy prescriptions in the United States.
Corporate/Other Segment
The Company presents the remainder of its financial results in the Corporate/Other segment, which primarily consists of Management and administrative expenses to support the Company’s overall operations and Products for which the Company no longer solicits or accepts new customers such as its large case pensions and long-term care insurance products.
Services
The company Supports patients on their health care journeys.4
- COVID-19
- Health Care and Wellness
- Prescription Drug Coverage
- Health Insurance
- Pharmacy
Company History
The first Consumer Value Store started in 1963, a year later, the name is changed to CVS.5
| Year | Milestone |
| 1963 | The first Consumer Value Store selling health and beauty products is founded in Lowell, Massachusetts. A year later, the name is changed to CVS. |
| 1969 | CVS is sold to Melville Corporation. |
| 1972 | CVS nearly doubles in size with the acquisition of 84 Clinton Drug and Discount stores. |
| 1990-2004 | CVS acquires multiple companies including Peoples Drugs, Revco and Eckerd drug stores. |
| 2006 | CVS acquires MinuteClinic®, the leading provider of in-store health clinics, as well as thousands of Sav-On and Osco drugstores from Albertson. |
| 2007 | CVS acquires Caremark, giving birth to the nation’s leading pharmacy-benefits manager. |
| 2014-2015 | CVS acquires Coram, Omnicare, Navarro Discount Pharmacy and all of Target's 1,600 pharmacies and clinics. |
| 2017 | CVS and Aetna announce a proposed merger — the biggest health care merger in US history. |
| 2018 | Aetna is acquired by CVS Health — and it begins a transformation of the consumer health experience. |
| 2023 | CVS Health completes acquisitions of Signify Health, a leading technology and services company focused on provider enablement and bringing clinicians into the home, and Oak Street Health, a leading multi-payor, value-based primary care company helping older adults stay healthy. |
References
- ^ https://www.cvshealth.com/news/company-news/cvs-health-completes-acquisition-of-oak-street-health.html
- ^ https://www.cvshealth.com/news/company-news/cvs-health-completes-acquisition-of-signify-health.html
- ^ https://www.cvshealth.com/news/company-news/cvs-health-reports-first-quarter-2023-results.html
- ^ https://www.cvshealth.com/services.html
- ^ https://www.cvshealth.com/about/our-strategy/company-history.html
