CVS chief medical officer: ‘We’re not looking to build out the entire health care delivery ecosystem’


The role of healthcare retail players, such as CVS (CVS), Walmart (And die)And now Amazon(Amzn), is closely watched by investors and doctors alike.

In its latest earnings, CVS emphasized a continued strategy in health services, even as rival Walgreens (World Boxing Association) He indicated a retreat. With its recent acquisitions of home health care provider Signify, and primary care provider for seniors Oak Street, CVS continues to look for ways to create a closed loop for patients within its own system.

“Oak Street ended the year with 202,000 lives at risk, a 27% increase over the previous year. During January, the number of Aetna members enrolled at the Oak Street Clinic doubled,” CEO Karen Lynch said on a recent earnings call.

“Signify completed 649,000 home assessments this quarter, an increase of 20% compared to the same period last year. Among our Aetna customers, we are expanding our addressable market using Signify’s strong capabilities in other products, including individual exchanges and Medicaid.” Lynch said.

Chief Medical Officer Sri Chagutu told Yahoo Finance that the company is “building a world of health around every consumer.”

“We’re not looking to build the entire health care delivery ecosystem. But where we choose to build is where we think there’s the greatest opportunity to improve health outcomes. And that’s primary care, retail health, home services and physician empowerment and accountable care,” Chaguto said in an interview. Broad talk: “This helps doctors engage in value-based care.”

When asked whether these services interfere with traditional providers, such as hospital systems and physician groups, by taking market share away from less complex cases, Chaguto said it’s the opposite.

“These are the most complex patients in our healthcare system, suffering from multiple chronic diseases, and in addition to chronic diseases, there are many aspects of social fragility and determinants of social need,” he said.

(Getty Images) (Spanish via Getty Images)

Growth amid downward pressures

The company’s latest earnings beat Wall Street expectations, reporting revenue of $93.8 billion for 2023, compared to an expected $90.7 billion. But it lowered its forecast for 2024, expecting next year to be very expensive.

This includes increased utilization costs for Aetna Medicare Advantage patients as delayed services continue to return due to the pandemic, and pharmacy benefit managers, such as CVS Caremark, have become the target of lawmakers in Congress looking for ways to reduce the power of these “middlemen.” Typically, these intermediaries are blamed for driving up costs in the health ecosystem, but Chaguto says they will help with the rush to use weight-loss drugs.

In the last few years there has been a frenzy over GLP-1s, drugs that have been used by diabetics to help increase insulin production and help slow digestion, for weight loss in obese patients.

Although GLP-1, named after the hormone in the body that it mimics, is not new, the latest formulations have achieved record-breaking weight loss results. This has led to increased interest from patients to online health platforms looking to capitalize on this trend by offering prescriptions.

However, according to CVS, 80% of prescriptions for the top four best-selling drugs are from Novo Nordisk (NVO(And Eli Lilly)LLY) For patients with type 2 diabetes.

Chaguto said drug administration companies will continue to lower prices to ensure access to more patients, and he expects that more competition — which could begin as early as the end of this year — will also help bring costs down. CVS benefits by earning fees on prescriptions for the drugs it offers, as well as rebates it earns from drug manufacturers in exchange for covering the drugs and providing access to them for patients.

But it’s not an unrestrained gold rush. CVS works with hesitant customers, such as insurance companies and employers, who are concerned about rising costs. GLP-1 drugs, which cost about $1,000 a month, have caused some employers and insurance companies to stop covering them, or require prior authorization in order to fill the prescription.

This includes CVS’s own insurer, Aetna, which previously told Yahoo Finance that “prior authorization is required to cover these medications. This process allows our doctors to review the application using evidence-based guidelines to ensure coverage is appropriate given the member’s clinical circumstances. Condition. May include The prior authorization process reviews the member’s age, body mass index, past medical history, and response to previous treatment.

CVS is also building clinical support for employers and insurers, to ensure that patients who get prescriptions actually need them, and then provide support to manage any side effects, according to Chagutoro.

Customers are taking a variety of approaches to GLP-1s, including waiting until prices come down, or even a way to ensure the right prescriptions are in place, before agreeing to cover them, he said.

“In addition to lowering prices, we offer coverage and clinical solutions to help employers and health plans access them,” he said.

He expects there will be new competitors on the scene, increasing the potential to reduce prices per prescription and net cost of prescription over the coming years.

Anjali Khemlani is Yahoo Finance’s chief health correspondent, covering all things pharma, insurance, care services, digital health, PBMs, and health policy and politics. Follow Anjalee on all social media platforms @AnjKhem.

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