Caremark merger proves itself as ‘game-changer’
When CVS merged with pharmacy benefits manager Caremark in 2007, the vertical integration marked a new paradigm for retail pharmacy, and was hailed by Tom Ryan, chairman, president and CEO, as a “game-changing” deal. Now, two years later, that appears to be the case.
The merger transformed CVS into a self-described “pharmacy healthcare service company,” with annual revenue of about $87 billion.
It is no secret that CVS has been hard at work to combine the strength of its retail and PBM services to change the way consumers use their pharmacy benefits, improve adherence and lower the costs for both patients and payers.
Perhaps the most notable initiative is the company’s Maintenance Choice program launched in 2008. Maintenance Choice allows consumers to purchase chronic 90-day prescriptions at CVS stores for the same price as at mail, and has proven to be extremely successful and profitable to the overall enterprise.
During the second quarter ended June 30, there were 270 clients signed up for its Maintenance Choice offering, compared with 200 in the first quarter, and about 25% of the additional clients are new clients to CVS’ PBM.
“The feedback has been extremely positive among the clients that have participated in it or are already using it, and we expect more clients to adopt Maintenance Choice going forward,” Ryan told analysts during the company’s quarterly conference call on Aug. 4.
While still in the midst of the 2010-selling season, the company now has more than 3,000 clients under contract, and its retention rate for 2010 is 96%, slightly higher than 2009, Ryan said.
While overall pharmaceutical growth has slowed, the specialty pharmacy segment continues to explode. However, facilitating a specialty-pharmacy business in a typical community pharmacy setting has been extremely tricky for several reasons, including—but certainly not limited to—the cost of inventories and the high-touch patient requirements. Looking to find a solution, CVS Caremark is piloting a specialty-pharmacy program in Florida that enables customers to pick up specialty-pharmacy prescriptions in any CVS store in the state, as reported in May by Drug Store News. The move not only speaks to the importance of the fast-growing segment in pharmacy, but also provides a glimpse into the future of how the traditional drug store can participate in specialty pharmacy.
“It’s about access and it’s about ease and it’s about low cost, so you have a situation where typically you’d have to call to make sure someone was home as we’re delivering this medication because of the storage requirements, etc. Now they can pick it up in the store,” Ryan told analysts during a first-quarter conference call in May when asked about the growth of specialty pharmacy and the progress of the integrated specialty management program.
Specialty is the fastest-growing piece of the pharmacy business, Ryan said, and he expected that, overall, specialty will grow in the 14% range.
The hub-and-spoke model that CVS is piloting is a glimpse into the future in terms of how the average corner drug store will be able to participate in specialty pharmacy. This participation could manifest as a central-fill type model—such as what CVS is employing, where it will leverage its CarePlus stores and its resources in Caremark to fill specialty prescriptions through its Florida stores—or through some outside network.
CVS Caremark also is leveraging its MinuteClinic business, and has launched injection training around specialty pharmacy.
Late-stage clinical trial results: MS drug is effective
ALISO VIEJO, Calif. Patients taking an investigational drug for multiple sclerosis fared better than those taking placebo, according to late-stage clinical results presented Friday at a neurology conference.
Avanir Pharmaceuticals said MS patients taking Zenvia (dextromethorphan and quinidine) in 30 mg/10 mg doses experienced a 11.9% greater reduction in pseudobulbar effect – an MS-related condition also known as PBA that causes sudden, uncontrollable episodes of laughter, crying and other emotional outbursts – than those taking placebo in a 12-week phase 3 trial, results of which the company presented at the 3rd World Congress on Controversies in Neurology in Prague, Czech Republic. Patients taking the 20 mg/10 mg dose did not do better than the placebo group.
“PBA represents an area of high, unmet medical need with no FDA-approved treatments currently available,” study presenter and trial steering committee member Daniel Wynn of the Consultants in Neurology Multiple Sclerosis Center stated. “Although the involuntary emotional outbursts of PBA cause considerable impairment for millions of individuals in the United States, it is under-recognized and commonly misdiagnosed.”
New report projects 12.6% increase of probiotics market
NEW YORK The two takeaways from this story are “the [U.S.] market is expected to grow at a rate of almost 14%” and “the early movers in the industry will benefit in terms of market share.”
That about describes the opportunity in a probiotic nutshell.
The rising interest in probiotics can be credited in part to Dannon’s Activia brand, a line of yogurts and yogurt drinks, which has been heavily advertised to the American consumer with the message that not all bacteria is bad for you — and in fact some bacteria taken on a regular basis can impart some pretty significant health benefits. That advertising message — that probiotics can be an important piece in a healthier-for-you diet — has been all the more reinforced as Bayer supports its probiotic Phillips Colon Health, and as Procter & Gamble rolls out its Align probiotic.
And the consumers already are core drug store shoppers. The ratio of women to men in search of a product delivering digestive benefits is about 2-to-1, according to industry experts. When women hit their 30s and 40s, that’s the point in their lives when they’re looking for a strategy in life to help them manage their digestive issues.