CVS Health Corporation 

Sector: Food, drug and mass retailers Countries of operation: US Key categories: Health care benefits, pharmacy services, pharmacy benefits management and retail/long-term care Annual Metrics [caption id="attachment_150456" align="aligncenter" width="700"] Fiscal year ends on December 31
*Trailing Twelve months ended March 31, 2022[/caption]   Summary Founded in 1892 and headquartered in Woonsocket, Rhode Island, CVS Health Corporation is a health services company that operates through four segments: Pharmacy Services, Retail/Long-Term Care (LTC), Health Care Benefits and Corporate/Other. The Pharmacy Services segment is the company’s pharmacy benefit manager (PBM), offering administration, clinical services, disease management services, formulary management, mail order pharmacy, medical spend management, plan design offerings, retail pharmacy network management services and specialty infusion and pharmacy services. The Retail/LTC segment sells prescription drugs, health and wellness products and general merchandise. Its Health Care Benefits segment provides consumer-directed, traditional and voluntary health insurance products and related services, including behavioral health, dental, medical, pharmacy and medical management capabilities. Lastly, its Corporate/Other segment offers administrative and management services. CVS Health offers specialty pharmacy services and a senior pharmacy care business. As of December 31, 2021, the company operates approximately 9,900 retail locations and over 1,200 walk-in medical clinics. Company Analysis Coresight Research insight: CVS is a leading health solutions company in the US: Over the years, it has grown to become the largest PBM in the country, and the leader in infusion, retail clinics and specialty pharmacy. In 2018, CVS Health also became the nation’s premier health benefits company, through the acquisition of Aetna—a provider of dental, disability, health care, pharmacy and group life insurance, and employee benefits. CVS Health Corporation has continued to perform strongly across all its segments with positive signs seen throughout its businesses. With the emergence of Omicron variant, the expansion of testing and vaccination was the main driver of CVS’s better than expected performance, particularly at the end of 2021. Furthermore, the company would look to capitalize on a vaccination drive involving first doses for children aged five to eleven and booster doses for adults. However, we expect vaccination drives and testing to reduce in 2022. On November 18, 2021, CVS announced plans to close 300 stores each year for the next three years. The company has stated that the closures are necessary due to changes in population and consumer buying patterns and in order to ensure that it has suitable stores in the appropriate locations to cater to future health needs. CVS Health has expanded its use of technology to improve its business process and reduce costs. In the first quarter of 2022, the company started using Microsoft text analytics and robotics in its specialty pharmacy to automate the 40% of prescriptions that were still paper or fax-based. Also, using machine learning and robotics, the company can now resolve a wide range of prescription drug claims, which previously required the attention of pharmacists, freeing them up to spend time with patients. This approach reduced overall cost and improved the patient experience, according to the company.

Tailwinds

Headwinds

Pharmacy Services and commercial national accounts in the Health Care Benefits expect strong sales growth in the near future Anticipated lower costs related to Covid-19 and improved Medicare risk-adjusted revenue reimbursement in Health Care Benefits, which could result in lower costs overall Continued contributions from ongoing cost savings initiatives Growth in sales driven by vaccination drives and testing to be witnessed Strong membership growth across all product lines, which could lead to strong revenue growth Well-positioned omnichannel pharmacy, which can help the company to boost sales volumes and fulfill prescriptions more cost-efficiently

Consistent pressure in Pharmacy Services from client price improvements, and in Retail from prescription drugs reimbursement Uncertainty regarding the expected revenue from Covid-19 vaccines and testing in its Retail operations Continued client price improvements, which could impact revenues Administration of a fourth booster, which is expected to impact the health benefits segment with incremental costs

  Strategy In its annual report for the year ended February 9, 2022, CVS Health outlined five key focus areas as part of its near-term and longer-term growth strategy: 1. Advancing all-payer primary care delivery capabilities

• Community health destinations to engage more consumers
• Broadening of its virtual care services

2. Optimizing retail portfolio, comprising three models:

• Advanced primary care clinics
• Enhanced health hub locations
• CVS pharmacy locations

3. Diversifying growth portfolio with new health services

• Expanding its capabilities in home health as it prepares for the 2023 launch of its post-acute transitions pilot for Aetna membership in select areas

4. Focusing on digital-first, technology-forward approach

• Plans to expand its digital-first health dashboard offering, which will make managing family health more seamless, convenient and personalized

5. Seeking to improve access, lower costs and enhance health outcomes by engaging with consumers

• Launch of new fulfillment option for consumers as part of its omnichannel health experience, allowing consumers to purchase health and wellness products online with an option for free same-day pickup

Revenue Breakdown (FY21) [caption id="attachment_150457" align="aligncenter" width="480"] Source: Company reports/Coresight Research[/caption]   Company Developments

Date	Development
May 26, 2022	CVS Health launches new virtual primary care solution on a single digital platform. The offering connects CVS Health’s services, clinical expertise and data for a more coordinated and consumer-centric health care experience, according to the company.
May 3, 2022	CVS Health announces the appointment of Dr. Sree Chaguturu as its Executive Vice President (EVP) and Chief Medical Officer, effective immediately.
May 2, 2022	CVS Health announces the appointment of Dr. Sree Chaguturu as its Senior Vice President (of Social Corporate Responsibility. She will report to Laurie Havanec, Executive Vice President & Chief People Officer.
April 29, 2022	CVS Health announces the completed installation of time-delay safes in all its 97 Nevada pharmacies, including those within Target stores.
April 28, 2022	CVS Health announces the completed installation of time-delay safes in all its 198 Arizona pharmacies, including those in Target stores. The safes are anticipated to help prevent pharmacy robberies.
March 29, 2022	CVS Health and Fresno Housing announce their collaboration to build new affordable housing in Fresno, California. Through Red Stone Equity Partners, CVS Health will invest an estimated $18.4 million into the Arthur at Blackstone, a new Fresno Housing development planning to break ground in spring 2022.
March 15, 2022	CVS Health announces plans to close 300 retail pharmacy stores over the coming years.
March 10, 2022	CVS Health announces that David W. Dorman, Independent Chair of the Board of Directors of CVS Health, will retire at the end of his current term (the annual meeting of stockholders to be held on May 11, 2022). The Board has unanimously selected Roger N. Farah to succeed Dorman as Independent Chair.
March 7, 2022	CVS Health announces that it will invest more than $15.3 million in partnership with Pedcor Investments and WNC to build 312 new affordable housing units in the uptown area of San Antonio. The investment is part of the company’s commitment to address the social determinants of health in underserved communities.
February 22, 2022	CVS Pharmacy announces the launch of six new innovative home healthcare products as an extension of the company's CVS Health product line. These bathroom safety and mobility products are rooted in customer insights and specifically designed to meet the needs of the aging, caregivers and those living with disabilities, according to the company.
February 7, 2022	Medable Inc. and CVS Health announce a collaboration to expand clinical trial access and engagement for patients at select MinuteClinic locations via Medable’s clinical trials software platform. CVS Health clinical trial services will manage the relationship.
January 19, 2022	CVS Health announces a collaboration with Uber Health, Uber's healthcare arm, to provide critical transportation support at no cost to people who need it most when seeking access to medical care, work or educational programs.
January 7, 2022	BosleyMD announces their expansion into CVS Pharmacy, entering 7,500 locations and thereby growing the brand's accessibility and availability to consumers nationwide.
December 1, 2021	CVS Health announces plans to invest $9.2 million with WNC & Associates, Inc. to provide 41 units of affordable housing for families and individuals in Washington, D.C.
November 2, 2021	CVS Health announces a $10 million commitment to the American Diabetes Association to reach five million patients and transform health outcomes
October 18, 2021	CVS Health announces that Joneigh Khaldun, M.D., MPH, FACEP has joined the company as Chief Health Equity Officer.
September 20, 2021	CVS Health announces that it will recruit qualified candidates to fill 25,000 clinical and retail jobs during a one-day national career event on Friday, September 24.
August 4, 2021	CVS Health announces that it will raise its minimum enterprise hourly wage to $15 an hour, effective July 2022, with incremental increases to the company’s competitive hourly rates starting August 2021.
May 26, 2021	CVS Pharmacy, the retail division of CVS Health, announces the addition of more than 150 new products under its portfolio of exclusive brands, including an expansion of the recently launched Live Better by CVS Health brand, new Gold Emblem Fair Trade Certified coffee, and the launch of Goodline Grooming Co., a men’s skin and grooming care brand exclusive to CVS.
May 18, 2021	CVS Health announces the appointment of Shawn Guertin as Executive Vice President and Chief Financial Officer, effective May 28, 2021.
April 29, 2021	CVS Health announces the launch of CVS Health Ventures, a dedicated corporate venture capital fund that will invest in and partner with high-potential, early-stage companies, focused on making health care more accessible, affordable and simple.
March 31, 2021	CVS Health announces new goals in support of its long-term corporate social responsibility (CSR) strategy, Transform Health 2030, and releases its 14th annual CSR report.
February 1, 2021	CVS Health is recognized by Fortune magazine as one of the World’s Most Admired Companies for the seventh consecutive year.
January 6, 2021	CVS Health announces that Michelle Peluso will join the company as Chief Customer Officer, effective January 25. Peluso will be responsible for transforming the consumer experience and accelerating its digital strategy
November 16, 2020	CVS Pharmacy, the retail division of CVS Health, announces that customers can now check out touch-free at 8,200 standalone retail locations, using PayPal and Venmo QR codes.
November 11, 2020	CVS Health announces the appointment of Daniel Finke as Executive Vice President, CVS Health and President, Health Care Benefits Segment, effective February 1, 2021.
October 27, 2020	CVS Pharmacy announces the launch of QuickRenew, an online contact lens prescription renewal tool, powered by technology from Premium Vision currently available on the CVS Optical website.
September 16, 2020	CVS Health announces that it will invest $13.7 million to help renovate 230 low-income housing units at the Rosewind apartments in Columbus, Ohio.
July 8, 2020	CVS Health announces that it will invest nearly $600 million over five years to advance employee, community and public policy initiatives that address inequality faced by Black people and other disenfranchised communities.
May 14, 2020	CVS Health launches its 13th annual corporate social responsibility (CSR) report and unveils Transform Health 2030, the company’s new CSR roadmap for the next decade.
April 6, 2020	CVS Health announces several steps to support Aetna-contracted health providers and their patients in response to the Covid-19 pandemic.
February 11, 2020	CVS Health announces that it invested $67 million in affordable housing in 2019, to provide support to underserved populations across the country.
October 22, 2019	CVS Health announces that it will expand BeautyIRL, its interactive beauty department, into nearly 50 stores by the end of 2019.
October 8, 2019	CVS Health announces that MinuteClinic, the company’s retail medical clinic, will roll out its video visit offering in the state of Pennsylvania and South Carolina.

  Management Team

• Karen Sue Lynch—President, CEO and Director
• Shawn Guertin—Executive Vice President and CFO
• Jonathan C. Roberts—Executive Vice President and Chief Operating Officer
• James David Clark—Senior Vice President, Controller and Chief Accounting Officer
• Susan V. Lisa—Senior Vice President of Investor Relations

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Source: Company reports/S&P Capital IQ