New Pharmacy Advisor Program for CVS - Analyst Blog
11 November 2011 - 5:23AM
Zacks
CVS Caremark (CVS) recently launched a new
Pharmacy Advisor program to help treat chronic cardiovascular
illness.
The Pharmacy Advisor for chronic cardiovascular care will
primarily focus on medication adherence for persistent illnesses
such as high blood pressure, high cholesterol, coronary artery
disease (CAD) and congestive heart failure (CHF). It has been noted
that high blood pressure single-handedly affects one out of three
adults, with the health care system costing roughly $76 billion
annually.
This program is based on the research done by the company along
with Harvard University, Brigham and Women's Hospital. The
research, published in a healthcare journal in January, found that
proper medication adherence can save nearly $4,000 hypertension
patients, $1,200 high cholesterol patients and $8,000 CHF patients
annually.
We are encouraged by the improved performance of CVS Caremark’
Pharmacy Services segment for the third consecutive quarter, which
had earlier been a drag on the company’s performance. This segment
posted a robust 25.8% increase in revenues to $14.8 billion during
the third quarter of fiscal 2011.
The significant growth was primarily on the back of the
long-term contract with Aetna (AET) as well as the
acquisition of the Medicare Part D business of Universal
American Corp. (UAM).
We are also impressed by CVS Caremark’ several recent contract
wins over Medco (MHS) in the recent past, which
include Federal Employee Program (FEP) contract in May 2011, as
well as the biggest US public pension fund Calpers.
We remain optimistic regarding CVS Caremark’s longer-term
potential based on its retail execution, deployment potential and
strong 2012 generics cycle. However, the proposed merger between
Express Script (ESRX) and Medco will intensify
competition in the Pharmacy Services segment.
CVS Caremark currently retains a short-term Zacks #2 Rank (Buy).
However, over the longer term, we remain Neutral on the stock.
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