CVS Will Expand its Beauty Category

CVS has announced it will be expanding its beauty offerings with three new exclusive collections. CVS will introduce 13 products from Jouviance, a Canadian biotechnology skin care brand, which range from $22 to $69. It will also unveil blemish control and eye treatment products from European-inspired brand Wilma Schumann. Wilma Schumann products range from $18 to $64. Its third new brand will be Promise Organic, featuring skin care, body care and multi-use oil for skin and hair products.

Health and beauty sales grew 25% faster over the past 3 years than the pharmacy’s general merchandise and consumables. CVS plans to bring in 1,200 new products over the next few years, and see its exclusive brands portfolio double by the end of this year.

CVS is shifting its focus to the beauty aisle, planning to update displays to educate customers on skin care products and provide easy navigation through the department. CVS will also offer services from in-store beauty consultants. CVS has partnered with a psychologist to study the role of beauty on overall health.

Source: Retailing Today

CVS TAKES OVER TARGET PHARMACIES

CVS Health and Target announced a $1.9 billion sale of Target’s pharmacy business to CVS. CVH will rebrand Target’s 1,700 prescriptions departments as CVS and CVS will acquire Target’s 80 clinic locations and rebrand them as MinuteClinic. Both companies also announced plans to develop 5-10 small format stores in the next 2 years that will be branded Target Express and contain a CVS Health pharmacy.

Both companies have stated goals of core business investments to drive growth, and focus on wellness as a signature category, focusing on consumers eating well, being active and finding natural and clean label products. The rollout will take place over a period of several months to ensure the smoothest possible transition for their pharmacy and clinic patients.

"This strategic relationship with Target supports the highly complementary customer base, brand and culture we share," said Larry Merlo, CVS Health president and CEO. “This relationship with Target will provide consumers with expanded options and access to our unique healthcare services that lead to better health outcomes and lower overall healthcare costs.”

"At Target, we've talked a lot about the evolving preferences of our guests and this partnership demonstrates that we're committed to putting them at the forefront of everything we do," said Brian Cornell, Target chairman and CEO. "By partnering with CVS Health, we will offer our guests industry leading healthcare services, and at the same time, sharpen our focus on elevating the way we deliver wellness products and experiences to our guests."

Source: Chain Store Age

Generic Utilization Lifts CVS Health In Q3

November 4, 2014

Tailwinds from specialty pharmacy and increased generic utilization lifted CVS Health up on Tuesday, as the company posted net revenues of $35 billion, representing an increase of 9.7% for the three months ended September 30.

"I'm very pleased with our strong results in the third quarter, which reflect better than expected revenue growth across the enterprise and expanding retail gross margins," said Larry Merlo, CVS Health president and CEO.  "The 2015 PBM selling season continued to be highly successful with a significant number of new business wins across all lines of business.  We also continued to deliver substantial free cash flow, enabling us to return more than $3.7 billion to our shareholders year to date.  We are well on track to return more than $5 billion to our shareholders through dividends and share repurchases for the full year 2014.

Revenues in the Retail Pharmacy Segment increased 3.1%, or $501 million, to $16.7 billion in the period.  Same-store sales increased 2% versus the third quarter of last year, with pharmacy same store sales up 4.8% and front-end same-store sales down 4.5%.  Front store same store sales would have been approximately 480 basis points higher if tobacco and the estimated associated basket sales were excluded from the period.  Front store same store sales were negatively impacted by approximately 190 basis points from recent generic drug introductions and by approximately 190 basis points from the implementation of Specialty Connect.  Specialty Connect transitioned all specialty prescriptions to the Pharmacy Services Segment, as they are being processed through the Company's specialty mail order pharmacies.  The implementation of Specialty Connect had a greater effect on revenues than prescription volumes due to the higher dollar value of specialty products.

For the three months ended September 30, the generic dispensing rate increased approximately 180 basis points in both the Pharmacy Services segment and Retail Pharmacy segment, to 82.5% and 83.3%, respectively, compared to the prior year.

Revenues in the Pharmacy Services segment increased 15.7% - or $3.1 billion - to $22.5 billion.  The increase was driven by growth in specialty pharmacy including the acquisition of Coram and the impact of Specialty Connect, as well as increased volume in pharmacy network claims.  Pharmacy network claims processed during the period increased 4.3% to 209.6 million compared to 200.9 million in the prior year.  The increase in the pharmacy network claim volume was primarily due to net new business and growth in Managed Medicaid, partially offset by a decrease in Medicare Part D claims.  Mail choice claims processed during the period decreased 1.3% to 20.7 million, compared to 21 million in the prior year.  The decrease in mail choice claims was driven by a decline in traditional mail volumes, which was partially offset by growth in CVS Health's Maintenance Choice program.

The company narrowed its earnings guidance range for the full year 2014.  CVS Health now expects to deliver Adjusted EPS of $4.47 to $4.50, from $4.43 to $4.51, excluding the $0.27 per share loss on early extinguishment of debt.  GAAP diluted EPS from continuing operations is expected to be $3.93 to $3.96, including the loss on the early extinguishment of debt.  The company raised its 2014 free cash flow guidance range to $5.7 billion to $6 billion, from $5.5 billion to $5.8 billion, and raised the 2014 cash flow from operations range to $7.4 billion to $7.7 billion, from $7.2 billion to $7.5 billion.  The company expects to deliver Adjusted EPS of $1.18 to $1.21 and GAAP diluted EPS from continuing operations of $1.12 to $1.15 in the fourth quarter.

During the three months ended September 30, CVS Health opened 45 new and acquired 33 retail drugstores, and closed four retail drugstores.  In addition, the company relocated 13 retail drugstores.  As of September 30, the company operated 7,935 locations in 47 states, the District of Columbia, Puerto Rico and Brazil.  These locations included 7,779 retail drugstores, 936 health care clinics, 17 onsite pharmacies, 26 retail specialty pharmacy stores, 11 specialty mail order pharmacies, four mail service dispensing pharmacies, and 84 branches and six centers of excellence for infusion and enteral services.

Source: Retaililng Today 

CVS Closes Navarro Discount Pharmacy Acquisition

September 8, 2014

CVS Health has completed the purchase of Miami-based Navarro Discount Pharmacy.

The acquisition includes Navarro's 33 retail locations and Navarro Health Services, a specialty pharmacy serving patients with complex or chronic diseases.  The retail pharmacies will retain the Navarro Discount Pharmacy name.

"Navarro has a rich history and commitment to Hispanic consumers and we are excited to welcome them into the CVS Health family," stated Helena Foulkes, president of CVS/pharmacy, the retail division of CVS Health.  "We value the strength of the Navarro brand and we look forward to combining Navarro's unique understanding of its customers' needs with CVS/pharmacy's best in class pharmacy services and high quality health, beauty and personal care products, a combination that will strengthen our service to the Hispanic community."

Navarro Discount Pharmacy caters to Hispanic and ethnic marketplaces and further differentiates itself by offering many products and services that are not found in traditional drug stores such as wireless phones, designer fragrances and a large assortment of OTC drugs and vitamins.

Source: Retailing Today

New Corporate Name For CVS Caremark

September 3, 2014

CVS Caremark is changing its corporate name to CVS Health to reflect its broader health care commitment and its expertise in driving the innovations needed to shape the future of health.

"For our patients and customers, health is everything and CVS Health is changing the way health care is delivered to increase access, lower costs and improve quality," announced Larry J. Merlo, President and CEO, CVS Health.  "As a pharmacy innovation company at the forefront of a changing health care landscape, we are delivering breakthrough products and services, from advising on prescriptions to helping manage chronic and specialty conditions."

CVS Health includes the company's retail business, which continues to be called CVS/pharmacy; its pharmacy benefit management business, which is known as CVS/caremark; its walk-in medical clinics, CVS/minuteclinic; and its growing specialty pharmacy services, CVS/specialty.  With 7,700 retail pharmacies, 900 walk-in medical clinics, a leading pharmacy benefits manager with nearly 65 million plan members, and expanding specialty pharmacy services, CVS Health enables people, businesses and communities to manage health in more affordable, effective ways.

As a further demonstration of its commitment to health, CVS Health also announced the end of tobacco sales at CVS/pharmacy as of September 3, nearly a month ahead of the previously targeted date of October 1.  In February, the company announced that it would end the sale of cigarettes and tobacco products at its CVS/pharmacy stores, making CVS/pharmacy the first and only national pharmacy chain to take this step in support of the health and well-being of its patients and customers.

"Along with the start of CVS Health, the sale of cigarettes and tobacco products at CVS/pharmacy ends today.  By eliminating cigarettes and tobacco products from sale in our stores, we can make a difference in the health of all Americans," Merlo declared.

"Today, as CVS Health, we are tobacco-free, reinventing pharmacy and taking our place among leaders in the health care community," Merlo concluded.

Source: Retailing Today 

CVS's Portfolio Of Enterprise Assets Drives 'Strong' Q2 Performance

August 5, 2014

As today's healthcare market continues to evolve, CVS Caremark's portfolio of enterprise assets is enabling the company to provide innovative solutions and products that are delivering results, as evidenced by its "strong" second quarter results released Tuesday morning.

"As the health care environment evolves we are uniquely positioned to address the quality, affordability and accessibility issues in the healthcare system today," president and CEO Larry Merlo told analysts during Tuesday morning's conference call.  "So, we are highly focused on the unique opportunities we see for growth and we will continue to take an active and growing role in shaping the future of healthcare."

Net income for the quarter increased 10.9% to $1.2 billion, compared with approximately $1.1 billion in the year-ago period.

Adjusted earnings per share for the three months ended June 30, 2014 and 2013, was $1.13 and 97 cents, respectively, an increase of 16.5%.  Adjusted EPS in the three months ended June 30, 2014 excludes $133 million and $124 million in 2014 and 2013, respectively, of intangible asset amortization related to acquisition activity, the company stated.

Net revenues for the quarter ended June 30 increased 10.7%, or approximately $3.4 billion, to $34.6 billion compared with the year-ago period.

Revenues in the Pharmacy Services Segment increased 16.2% to $21.8 billion during the quarter, driven by net new business growth in specialty pharmacy including the acquisition of Coram and the impact of its new Specialty Connect, drug inflatin and product mix, partially offset by an increase in generic dispensing.

Specialty Connect integrates the company's mail and retail capabilities, providing members with the choice to bring their specialty prescriptions to any CVS/pharmacy, all prescriptions are filled through the company's specialty mail order pharmacies, so all revenue from this specialty prescription services program is recorded within the Pharmacy Services Segment.  Members then can choose to pick up their medication at their local CVS/pharmacy or have it sent to their home through the mail.

The Specialty Connect offering has been well received by clients and patients, according to the company.  As of July, more than 60,000 specialty patients have transitioned to this model.

"The program is generating high satisfaction scores with patients.  It resonates with clients as a differentiated approach to simplifying the specialty process for members, and physicians appreciate the ease of use in getting patients started on therapy," Merlo told analysts.

In providing a PBM 2015 selling update, the company stated that gross wins for 2015 is currently $5.4 billion.  Net new business is $2.6 billion.  As for renewals, the company has completed nearly $26 billion in business up for renewal with a retention rate of nearly 97%.

"I think our selling season success reflects our track record of generating savings for our clients through our unique suite of capabilities.  Top of mind for clients this selling season is achieving better control of their specialty spend," said Merlo.

Revenues in the Retail Pharmacy Segment increased 4.5% to $16.9 billion.  Same-store sales increased 3.3%, with pharmacy same-store sales up 5% and front-end same-store sales down 0.4%.

Despite a positive impact of approximately 80 basis points from the shift of the Easter holiday, front-end same-store sales were negatively impacted by softer customer traffic, partially offset by an increase in basket size.  In addition, front-end same-store sales are beginning to be impacted by tobacco.  In February, the company announced that it will stop selling cigarettes and other tobacco products at its more than 7,600 CVS/pharmacy stores across the United States by October 1.

"As we plan for exiting the tobacco category this fall, we have begun to see a sales impact," Merlo told analysts, noting that front-end same-store sales would have been approximately 110 basis points higher if tobacco and the estimated associated basket sales were excluded.  "Now, adjusting for this tobacco impact and the Easter shift, front-store comps were roughly flat in the quarter, sequentially improving from Q1.  Front store traffic decreased as customers continued to aggregate their trips and, at the same time, our average basket size continued to increase, reflecting the strength of our Loyalty program and the personalization it enables us to offer."

Pharmacy same-store sales were negatively impacted by approximately 160 basis points from recent generic drug introductions and by approximately 130 basis points from the implementation of Specialty Connect.  The implementation of Specialty Connect had a greater effect on revenues than prescription volumes because of the higher dollar value of specialty products, the company stated.

Commenting on the acquisition of Hispanic-owned pharmacy retailer Navarro Discount Pharmacy, Merlo said the company expects to maintain the current product mix and will share its learnings of Hispanic marketing and merchandising with other CVS markets where it makes sense.

"The Navarro brand is one of the most recognizable in the Hispanic marketplace.  We plan to retain it.  As you recall, we adopted a similar strategy in maintaining the Longs Drug name for our acquired locations in Hawaii and that has been successful," Merlo said.

The Navarro transaction is expected to be completed later this year.

In light of its "strong performance" during the quarter, the company raised and narrowed its earnings guidance range for the full year 2014.  It now expects to deliver adjusted EPS of $4.43 to $4.51, up from $4.36 to $4.50.  GAAP diluted EPS from continuing operations was raised to $4.16 to $4.24, up from $4.09 to $4.23.  It continues to expect to deliver 2014 free cash flow of $5.5 billion to $5.8 billion, while the 2014 cash flow from operations range was raised to $7.2 billion to $7.5 billion, up from $7.0 to $7.3 billion.  The company expects to deliver adjusted EPS of $1.11 to $1.14 and GAAP diluted EPS from continuing operations of $1.04 to $1.07 in the third quarter of 2014.

Source: Retailing Today 

CVS Acquires Navarro In South Florida

July 14, 2014

It is one of the smaller acquisitions CVS Caremark has done, but the purchase of the 33-unit Miami-based Navarro Discount Pharmacy could have big implications.

CVS Caremark late Monday said it reached an agreement with Navarro, the largest Hispanic owned drugstore chain in the U.S., to acquire 33 stores and Navarro Health Services, a specialty pharmacy serving patients with complex or chronic diseases.  CVS Caremark operates more than 7,600 stores, but said it will continue operating the acquired units under the Navarro banner.

"The acquisition of Navarro wil strengthen CVS pharmacy's position in the Hispanic marketplace, the fastest growing demographic in the U.S., and we are excited to be adding the Navarro Discount Pharmacy brand to the CVS pharmacy family," said Helena Foulkes, president of CVS/pharmacy.

"Like CVS pharmacy, Navarro is committed to improving patient health and providing individualized attention," said Juan Ortiz, Navarro's CEO.  "The combination of our stores will continue our tradition of excellent pharmacy care and high quality products."

Navarro caters to South Florida's heavily Hispanic and ethnic marketplaces and further differentiates itself by offering many products and services that are less prevalent in traditional drugstores such as wireless phones and designer fragrances.

Source: Retailing Today

CVS EDI 852 Reporting

If you are a vendor supplying to CVS, you are eligible to receive product sales activity and inventory data via EDI 852. Preparing to setup and receive the EDI 852 files can be confusing, and creating usable reports for your team can be very time consuming. Fortunately, Accelerated Analytics® provides a simple, outsourced service for all your CVS EDI 852 reporting needs.

Using Accelerated Analytics® makes all your reporting headaches go away. With Accelerated Analytics®, we handle all the data conversion, database hosting and reporting. We even provide training and the end user reporting tools. 

Accelerated Analytics® benefits:

• Eliminate manual data entry and manipulation
• Consolidate all CVS store data on all your SKU's into one reporting database
• Pre-built exception reports with color coded dashboards
• No software or hardware to purchase
• Sophisticated charts and graphs

Available reports:

• This weeks sales and inventory by store and SKU
• Last weeks sales and inventory by store and SKU
• This months sales and inventory by store and SKU
• 6 week rolling sales and inventory by store and SKU
• Sell-thru
• Inventory turns
• Days supply on hand 

Accelerated Analytics® will give you the ability to anticipate changes in sales and inventory, so you can make adjustments before a costly mistake occurs. Our EDI 852 reporting is the best on the market.