Capitalizing on the Retailization of Health Care Helena Foulkes Executive Vice President & President, CVS Pharmacy
Agenda Retail Pharmacy Retail Pharmacy Partnering Through Enterprise Capabilities Update on Key Assets Front Store Growth Strategy 2
R E T A I L P H A R M A C Y Retail Pharmacy at a Glance Estimated 2016 CVS Pharmacy Revenue 25% 75% Front Pharmacy Store 3
R E T A I L P H A R M A C Y Strong Record of Pharmacy Share Growth Over the Past Several Years CVS Pharmacy Share of Total U.S. Retail Prescriptions +300 23.8% bps 20.8% 2013 Sep YTD 2016 Sep YTD 4 Refer to endnotes for additional information.
R E T A I L P H A R M A C Y Significant Presence in the U.S. Retail Pharmacy Market Size and Scale • 9,600+ retail locations • More than 1.1B retail scripts filled annually We own the last mile through our unmatched patient touchpoints and high frequency of consumer interaction 5 Refer to endnotes for additional information.
R E T A I L P H A R M A C Y A Strong Track Record of Leading Performance Medication Possession Ratio +340 +580 bps +610 bps bps 84.9 83.5 80.6 80.1 79.1 74.5 Diabetes Hypertension High-Cholesterol Top Competitors CVS Pharmacy We deliver best-in-class clinical outcomes to all patients 6 Refer to endnotes for additional information.
R E T A I L P H A R M A C Y Our Success Is Driven by Integrating Clinical Programs Into Our Workflow System PATIENT CARE – GAP IN CARE An Integrated Approach Smith, John Phone Number: 123-456-7899 DOB: 01/01/1900 Age: 56 Years Gender: Male Txt Message: Not added • Instructions: Confirm patient has gap in care and discuss reasons to close therapy Our history with CVS Caremark gap. If creating prescriber request, always confirm the correct prescriber to contact has focused us on outcomes with the patient. Your pharmacist would like to speak with you today • We have built clinical programs about a potential gap in your care into our workflow If you have diabetes, its important to speak with your doctor about the best ways to manage your condition • This ensures that performing • Common long-term effects of diabetes can include reduced heart rate function • Statin therapy may help prevent this complication clinical programs is a key priority • Since we do not see a statin medication in your profile, we can contact your doctor to review this information • Your doctor will determine if a statin therapy is appropriate for you We are now leveraging these “clinical pipes” with other PBMs and health plans 7
R E T A I L P H A R M A C Y Continuing to Innovate in Our Patient Communications and Adherence Programs … and Has Developed Dozens of Pharmacy Innovation Team Focuses on … Programs, Including: Right Outreach Right Patient Mobile Insurance ScriptSync Rx Pickup Card Texts Right Medium Right Time Rx Mobile 30- to 90- Expiration In-store Day Switch Texts Beacons Texts We have a suite of personalized adherence tools to better deliver clinical programs 8
R E T A I L P H A R M A C Y ScriptSync Drives Adherence Through Improved Convenience 73% 1.5M+ Patients picking up multiple prescriptions per month can accept offer enrolled since to enroll launch now coordinate refills and improve adherence 6 percentage point lift in medication possession after enrollment Allows us to solve a consumer pain point AND provide added value to PBM and health plan partners 9 Refer to endnotes for additional information.
Our Text Alerts Are Easier for Patients and Our Teams We are Driving Adoption … … and an Innovative, Integrated Experience Adherence text Your insurance Your Rx may Restock on-hand messages sent card is not on file have expired medications for back-to-school 600M 85% CAGR 175M Text us to refill Text us a photo Text us to contact your medication of your card your doctor 2014 2016E We own the last mile and understand our consumers 10 Refer to endnotes for additional information.
R E T A I L P H A R M A C Y Because of Our Unique Capabilities, We Have Grown Faster Than the Market Growth in Prescriptions (2013 – 2016, Sep YTD) 27% Nearly 55% of our growth ~4X through Faster non-Caremark 7% payors CVS All Other Pharmacy Market 11 Refer to endnotes for additional information.
R E T A I L P H A R M A C Y A Majority of Our Scripts Are Non-Caremark CVS Pharmacy Scripts by PBM (Oct 2016 YTD) Other PBMs 65% 35% CVS Caremark and Payors We are committed to partnering with other PBMs by leveraging the assets of CVS Health 12
Agenda Retail Pharmacy Partnering Through Enterprise Capabilities Partnering Through Enterprise Capabilities Update on Key Assets Front Store Growth Strategy 13
Bringing Together Assets From All of CVS Health to Win With PBMs and Health Plans Cost Retail Management Tools Long-term Mail Care Retail Specialty Clinics Clinical Infusion Programs Patients Medical Digital Claims Providers Payors Editing …enabling us to deliver superior outcomes at a lower cost 14
We Deployed Select Assets for a Non-PBM Medicaid Payor Seeking to Drive Cost Efficiencies and Retention Cost Retail Management Tools Long-term Mail Care Retail Specialty Clinics Clinical Infusion Programs Patients Medical Digital Claims Providers Payors Editing 15
Non-PBM Medicaid Payor Saw Improved Clinical Results Cost Retail Management • Retail marketing to support Tools Long-term member retention Mail Care Retail Specialty Clinics • Customized clinical pilots Clinical Infusion Programs leveraging in-store and telephonic capabilities Patients • Emergency room diversion Medical Digital Claims outreach program Providers Payors Editing Closed gaps for patients at a rate 2X higher than client expectations 16
For Another Non-PBM Client, We Used Our Clinical Programs to Improve Star Ratings Cost Retail Management Tools Long-term Mail Care Retail Specialty Clinics Clinical Infusion Programs Patients Medical Digital Claims Providers Payors Editing 17
Non-PBM Client Achieved Improvements in Star Ratings Across Multiple Plans Cost • Adherence and refill opportunities Retail Management executed and enabled: Tools Long-term − ReadyFill and 90-Day Retail Mail Care − Care 1-on-1 Retail Specialty Clinics Clinical • Clinical interventions and future initiatives: Infusion Programs − Client clinical rules engine − ScriptSync Patients − CVS Pharmacy Clinical call center Medical Digital Claims Providers Payors Editing Assisted plan in improving Star rating from 3 to 4 and achieved 4% increase in adherence 18
CVS Health Is Launching a Strategic Relationship With Optum Cost Retail Management Tools Long-term Mail Care Retail Specialty Clinics Clinical Infusion Programs Patients Medical Digital Claims Providers Payors Editing …enabling us to deliver superior outcomes at a lower cost 19
CVS Health Is Launching a Strategic Relationship With Optum Partnering to Offer Employers a Goal New Pharmacy Network Option • Fill 90-day scripts at any CVS Pharmacy or via OptumRx home delivery By continuing to partner with • Help improve consumer engagement and help health outcomes by leveraging CVS Pharmacy’s unmatched clinical other PBMs and capabilities health plans we will grow our • Going forward, Optum and CVS Pharmacy will continue prescription to develop new pharmacy and health solutions leveraging our suite of assets share 20
Agenda Retail Pharmacy Partnering Through Enterprise Capabilities Update on Key Assets MinuteClinic MinuteClinic Omnicare Target Front Store Growth Strategy 21
M I N U T E C L I N I C MinuteClinic Footprint Covers Most Populous U.S. Areas • Fully integrated 79 Target clinic locations • > 50% retail clinic market share • Approximately three times 1,136 larger footprint than closest Total Clinics competitor Clinic State MinuteClinic More than 50% of the U.S. population is within 10 miles of a MinuteClinic 22 Refer to endnotes for additional information.
M I N U T E C L I N I C MinuteClinic Enhances the CVS Value Proposition to Patients, Providers, Payors and PBMs Patient Engagement Low-Cost Care Population Health and Access • Address gaps in care with • Up to 80% less expensive Investing in: providers, payors and PBMs than other sites of care • Scheduling tools and • Provide health risk • MinuteClinic Savings walk-in options assessments/biometric Strategy can further reduce • Expansion of primary screenings costs care services • Electronic record integration • Telehealth with health systems 23
Agenda Retail Pharmacy Partnering Through Enterprise Capabilities Update on Key Assets MinuteClinic Omnicare Omnicare Target Front Store Growth Strategy 24
O M N I C A R E Omnicare Has Significant Growth Opportunities Opportunities Omnicare Share of Prescriptions • Achieving operational (Oct 2016 YTD) excellence across Omnicare footprint • Rolling out industry-leading Skilled Assisted living and nursing other communities transitions experiences 76% 24% • Serving assisted living and independent living communities with new integrated capabilities 25 Refer to endnotes for additional information.
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