CVS Health released its second quarter earnings report Aug. 7, beating analyst predictions as its three businesses reported better-than-expected results, according to CNBC.
Here is a breakdown of five things for pharma leaders to know:
1. CVS' net income grew. CVS reported net income of $1.93 billion in the second quarter of 2019. This is up from a loss of $2.56 billion in the same period one year prior.
2. Aetna deal begins to pay off for CVS. CVS' net sales reached $63.43 billion, up 35 percent from the $46.92 billion in the second quarter of 2018. The jump in sales is largely attributed to CVS' acquisition of health insurer Aetna. The new insurance business contributed about $17 billion in sales.
3. PBM, pharmacy businesses also contributed to sales jump. CVS Pharmacy filled 19 percent more prescriptions in the second quarter of 2019, compared to the same period a year prior. CVS Caremark, the retail pharmacy giant's pharmacy benefit management arm, also saw sales rise because the prices of brand name medications increased.
4. CVS will slow pace of store expansions. CVS typically opens about 300 stores per year. However, this year CVS will only open about 100 stores, and in 2020, the company will open about 50. CVS Pharmacy President Kevin Hourican said on the second quarter earnings call that this was a "natural change."
5. CVS will focus efforts on HealthHubs. CVS is shifting its focus to remodeling stores into HealthHubs, which are its health-focused concept stores that offer blood testing and sell more health products.
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