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The role of retailers in healthcare, such as CVS (CVS), Walmart (WMT), and now Amazon (AMZN), is gaining attention from investors and clinicians alike.
In its latest financial results, CVS emphasized its strategy to continue in the medical services sector, even as rival Walgreens (WBA) has signaled its exit. Through its recent acquisitions of home health care provider Signify and senior primary care provider Oak Street, CVS continues to explore ways to create a closed loop for patients within its own system.
“Oak Street ended the year with 202,000 lives at risk, an increase of 27% from the previous year. By January, the number of Aetna members enrolled in Oak Street clinics had doubled. ,” CEO Karen Lynch said during a recent earnings call.
“Signify completed 649,000 in-home assessments in the quarter, an increase of 20% compared to the same period last year. We are leveraging our unique capabilities to expand our addressable market,” Lynch said.
Chief Medical Officer Sri Chagtur told Yahoo Finance that the company is “building a world of health around every consumer.”
“We are not trying to build an entire healthcare delivery ecosystem, but what we are choosing to build is where we believe there is the greatest opportunity to improve health outcomes. . That’s primary care, retail medicine, home services, physician support and accountable care. And that’s helping physicians participate in values-based care,” Çagtur said in a recent wide-ranging interview. Told.
Asked whether these services are undercutting traditional providers such as hospital systems and physician groups by taking market share away from less complex cases, Çagtur said the opposite is true. Ta.
“These patients are the most complex patients in our healthcare ecosystem, with multiple chronic conditions and many aspects of social vulnerability and social determinants of need in addition to their chronic conditions. “We have a lot of problems,” he said.
Growth under downward pressure
The company’s recent earnings beat Wall Street expectations, with 2023 sales of $93.8 billion, compared to expectations of $90.7 billion. However, the company has revised down its outlook for 2024, expecting an expensive year ahead.
This includes increased costs for patients using Aetna Medicare Advantage as services continue to reopen due to pandemic delays, and pharmacy benefit managers like CVS Caremark, which It has become a target for members of Congress who are considering ways to reduce its power. . ” These intermediaries are usually blamed for increasing costs in the healthcare ecosystem, but Çagtur says they could help support the boom in weight-loss drug use.
The excitement surrounding GLP-1, a drug used in diabetics to increase insulin production and slow digestion, has been approved in recent years for weight loss in obese patients.
GLP-1, named after the hormone in the body that it mimics, is not new, but modern formulations are producing record weight loss results. This has sparked a flurry of interest, from patients to online medical platforms looking to take advantage of the trend by offering prescriptions.
Still, 80% of prescriptions for Novo Nordisk’s (NVO) and Eli Lilly’s (LLY) top-selling drugs are for people with type 2 diabetes, according to CVS.
Çagtur said PBMs will continue to lower prices to ensure access for more patients, and he expects further competition, which could begin as early as the end of this year, will also help reduce costs. . CVS makes money from fees on drug prescriptions it dispenses, as well as kickbacks it receives from drug companies for covering drugs and providing access to patients.
But it’s not a free gold rush. CVS is working with hesitant customers, such as insurance companies and employers, who are concerned about increased costs. The GLP-1 drug, which costs about $1,000 a month, has caused some employers and insurance companies to drop coverage or require prior authorization to write a prescription.
This includes CVS’ own insurance company, Aetna, which previously told Yahoo Finance that “coverage for these drugs requires prior authorization. This process allows our clinicians to “We can review requests using evidence-based guidelines and ensure that coverage is appropriate given the member’s clinical condition.” The pre-approval process may include consideration of the member’s age, BMI, prior medical history, and response to previous treatments. ”
CVS is also building clinical support for employers and insurance companies to ensure that patients receiving prescriptions actually need them, and providing support to manage side effects, Çagtur said. It is said that there is
He said customers are taking a variety of approaches to GLP-1, including waiting until prices come down, or until there is a way to ensure proper prescribing, or until they agree to insurance coverage. .
“Not only are we lowering prices, but we are also providing coverage and clinical solutions that employers and health plans can take advantage of,” he said.
He expects new competitors to emerge and drive the ability to lower the price per prescription and the net cost of prescriptions in the coming years.
Anjalee Khemlani is a senior health reporter at Yahoo Finance, covering all areas of pharma, insurance, care services, digital health, PBM, and health policy and politics.Follow Anjali on all her social media platforms @AjKhem.
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