Trailblazer embarks on new chapter
Over the years, CVS Caremark has grown from a go-getting New England-based regional player to a nearly $100 billion pharmacy healthcare giant known for its vertically integrated pharmacy-PBM model via the 2007 acquisition of Caremark, its highly successful loyalty card program and its innovative beauty concepts.
Now, the industry trailblazer is embarking on a new chapter with a new leader at the helm and a keen eye on driving medication adherence, curbing rising healthcare costs and improving the health outcomes of its patients nationwide with its far-reaching store network and arsenal of products and services.
Larry Merlo took the reigns as CEO on March 1, becoming CVS’ fourth CEO in the company’s history. Tom Ryan retired as CEO after spending 36 years with the company, and had remained nonexecutive chairman until the company’s annual meeting of shareholders in May.
The decision to select Merlo as the new CEO came as little surprise, as he has played a key role in the evolution of the company and has an impressive track record of integrating major acquisitions. Under Merlo’s leadership, CVS completed some of the most successful acquisitions in the history of retail pharmacy — including Longs Drug stores, Osco/Sav-on, Eckerd and Revco — and delivered significant organic growth in major markets across the country.
Merlo has indicated that under his watch three things will define the company’s future success:
Flawless execution of its strategy, which is lowering healthcare costs while improving the health of its consumers and leveraging its integrated pharmacy services model;
Stressing more cross-functional thinking and action across the company, producing even higher levels of customer service; and
Enhancing value for all of its shareholders in ways such as improving dividend payouts and share repurchases.
“We certainly have the right assets in place to continue to be a very successful company for years to come, and that is a real credit to [Tom Ryan’s] vision of the future of pharmacy health care. Throughout his tenure, Tom has built a culture that is focused on innovation, customer service and flawless execution, and I certainly look forward to building upon his legacy,” Merlo told analysts in February.
Merlo has clearly hit the ground running, quickly extinguishing conjecture in the marketplace of potential plans to split up the company, outlining a five-point plan for PBM profit improvement and emphasizing the company’s ability to “effectively compete” in the PBM industry.
Year 2011 is slated to be the year the company will break trends on top-line growth in the PBM, and 2012 is expected to be the year it breaks trends on profit growth.
“There are many reasons for optimism about our PBM’s long-term prospects, starting with its performance in 2012. First and foremost, 2012 is expected to be the strongest year in generic [drug] launch history. … Second, the streamlining benefits will begin to outweigh our investment costs; third, we will see a ramp in accretion from the Aetna contract; fourth, we anticipate continued growth in both specialty and the Medicare Part D businesses; and fifth, our focus on client service and satisfaction, along with our innovative products and services, will provide continued momentum in renewal and new sales success,” Merlo told analysts during February’s conference call.
Furthermore, CVS Caremark’s acquisition of the Medicare Part D business of Universal American not only more than doubles the size of CVS Caremark’s Medicare Part D program, but the move came just as the first baby boomers turned 65 years old.
MinuteClinic, which by 2015 is estimated to operate about 1,060 clinics in 100 markets, also will take on added significance going forward as 32 million uninsured gain coverage beginning in 2014, amid an ongoing primary care physician shortage.
Aside from expanding its footprint and scope of service — through such offerings as its monitoring services for patients with diabetes, high cholesterol, high blood pressure and asthma — MinuteClinic also is forming a number of strategic affiliations with health systems to enhance the high-quality, affordable healthcare services provided to patients and communities across the country.
However, that’s not to say that the front of the store is not of great importance, as evidenced by the continued focus on and success of CVS’ ExtraCare loyalty program, which has been expanded with the new ExtraCare Beauty Club; the rollout of a new store brand called Just the Basics; the completion of more than 200 Urban remodels in the past year; and the implementation of the expanded consumables planogram in about 4,000 stores.
Charged with integrating all the company’s capabilities in branding, communications, healthcare-reform strategy, etc., to forge even stronger partnerships and further improve pharmacy care delivery is ExtraCare loyalty program architect Helena Foulkes, who was recently named EVP and chief healthcare strategy and marketing officer.
Clearly, Ryan’s retirement earlier this year marked not an end of an era, but rather the beginning of a new chapter for the Woonsocket, R.I.-based powerhouse.
Sephora glams up newest NYC locale
NEW YORK — New York City’s Meatpacking District is now the home of Sephora’s 16th Manhattan location — a stunning beauty destination that opened in mid-September and incorporates innovative design, state-of-the-art services and exclusive brands.
Nestled on the corner of W. 13th Street and Ninth Avenue, Sephora occupies a building that typifies the area’s iconic architecture, with an interior that features sleek, modern design. Updated fixtures and an open, flowing layout allow for easy navigation of key product areas, including skin care, nail, fragrance and color, as well as the Sephora Collection 2.0 display, which features a vibrant wall of color, a unique fixture dedicated to brushes and complexion stations to simplify finding the perfect foundation. It also marks the first Sephora in the nation to feature a completely mobile checkout.
Shoppers also can indulge in the Beauty Art Studio, a destination for mastering any new beauty look. Each station features ultra-modern glass, chrome and black fixtures with LED screens and enhanced lighting for a luxurious experience. Services to choose from include Treat & Conceal, Beautiful Skin and Faux Lash Express Services.
For more photos, click here.
Reports: ONDCP deputy director advocates Rx-only for PSE
FRANKFORT, Ky. — The debate on the prescription status of pseudoephedrine in the state of Kentucky heated up last week as the deputy director of the White House Office of National Drug Control Policy Benjamin Tucker on Wednesday told Kentucky lawmakers that they should mandate PSE to Rx-only status, according to reports.
Tucker last week was the keynote speaker at the Kentucky Drug Summit, part of the Kentucky League of Cities annual convention, and headlined a panel of federal, state and local experts to examine pill mills, meth labs and prescription drug abuse.
Kentucky considered legislation in 2011 that would require a doctor’s prescription for medicines containing pseudoephedrine, KLC reported. "After debate over limiting access to popular medicines used to combat colds and allergies, a compromise was offered that would generally require prescriptions to buy the medications, but pharmacists also could dispense them to those obviously suffering from colds and allergies," KLC wrote in a 2011 legislative update published by the group. "Ultimately, the legislation and amendments offered died in session. It is very likely this bill will reappear in 2012."
On Friday, the Consumer Healthcare Products Association offered another solution to members of the Kentucky General Assembly — adopt the Meth Offender Registry Block List, a tool that would block convicted meth offenders from purchasing medicines containing pseudoephedrine without a doctor’s prescription.
A 2010 draft report from the Kentucky Legislative Research Commission estimated that the system would block 5,500 known criminals from purchasing medicines containing PSE, CHPA noted.
"Implementing the Meth Offender Registry Block List, which will soon be in use in Tennessee, will strike right at the heart of the problem — the criminal meth cook," stated Carlos Gutierrez, director of state government relations for CHPA. "There is no need to unfairly punish law-abiding consumers when we have an option to block the criminals whom we know are committing the crimes."
"CHPA remains opposed to the proposed prescription mandate for legal, FDA-approved cold and allergy medicines containing pseudoephedrine," Gutierrez said.