Financial Annalysis of Cvs

Financial Analysis of CVS Health

By: Jen Van Vooren

CVS Health is a pharmacy innovation company whose purpose is helping people on their path to better health. Through more than 9,600 retail pharmacies, more than 1,100 walk-in medical clinics, a leading pharmacy benefits manager with nearly 80 million plan members, a dedicated senior pharmacy care business serving more than one million patients per year, and expanding specialty pharmacy services, CVS Health enables people, businesses and communities to manage health in more affordable and effective ways. This unique integrated model increases access to quality care, delivers better health outcomes and lowers overall health care costs.

Most consumers are only familiar with the retail offering of CVS stores. They fill prescriptions, pick up health and beauty items, and grab a few snacks for a road trip in our 9600 locations across all fifty states, DC, and Puerto Rico. The retail stores within the company are the foundation of the multi-faceted healthcare corporation and it all started with one tiny store selling health and beauty products.

In 1963, the first CVS store, selling health and beauty products was founded in Lowell, Massachusetts by brothers Stanley and Sidney Goldstein and partner Ralph Hoagland. CVS stands for Consumer Value Stores. The original CVS stores were often referred to as “dime stores” complete with soda fountain and a vast assortment of candies. It was not until 1967 the first CVS store with a pharmacy was opened in Warwick, RI. Today CVS will very rarely open a new location that does not include a pharmacy within it. Currently, the pharmacy department accounts for roughly 70% of the total stores profitability.

CVS has many competitors in the retail pharmacy market, but the company itself is comprised of four unique healthcare divisions. The most popular division of CVS Health would be the CVS retail convenience stores that include pharmacy departments. There are also walk-in clinics within the retails stores called MinuteClinic which are staffed by nurse practitioners and physician assistants who follow nationally recognized clinical guidelines to diagnose and treat a range of conditions. Currently there are 1100 MinuteClinic locations within our CVS retail stores nationwide, with plans for expansion to 1500 locations by 2018.

Caremark is our PBM or pharmacy benefit manager and mail service pharmacy division of CVS Health. Caremark provides service and support not only to their covered members, but they also work with employers, health insurance companies, the government and other health benefit program sponsors to design and administer prescription coverage plans. This includes formulary management, discounted drug purchase arrangements and clinical services and health care interventions.

The final division of CVS Health is called CVS