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CVS ‘moving deeper into doctors’ turf’

August 8, 2017

CVS Health Corp., hit by slower store sales and the defection of some big insurance providers, is moving ever more into doctors’ turf in a bid to win back business.

The company said Tuesday it will expand a program in which it marshals pharmacists, hundreds of on-site medical clinics and its vast data network to help people manage chronic diseases including asthma and high blood pressure.

It is an extension of a test program launched earlier this year to help improve the health of people with diabetes through close monitoring of glucose levels, medication adherence and lifestyle habits.

In taking on chronic disease, one of health care’s most vexing and costly problems, CVS sees an opportunity to wrest back business from rivals in the pharmacy-benefits sector.

CVS last year lost contracts from Prime Therapeutics, which manages pharmacy benefits for some Blue Cross and Blue Shield plans, and Tricare, a Defense Department health-care program, to Walgreens Boots Alliance Inc. At the time, the company said the lost deals could cost it 40 million prescriptions this year.

Prescription volumes were flat for the most recent quarter, the company said Tuesday, largely due to the loss of contracts to Walgreens. Overall, profit and revenue rose as an increase in pharmacy services offset declines in retail sales and pharmacy same-store sales. Pharmacy services, such as managing drug claims for health plans, accounted for $32.3 billion of the $45.7 billion in second-quarter revenue.

The CVS program to manage chronic disease aims to bring down costs both for patients and their insurance providers, the company said. In order for a person to participate, they must belong to a health plan that has a contract with CVS’s pharmacy-benefit business.

Drugstore chains have long deployed resources to help patients combat chronic diseases. Walgreens has a program with Express Scripts Holding Co., the largest U.S. administrator of prescription-drug benefits, to improve medication adherence for people with diabetes. But the CVS program is more extensive and unusual in that it aims to lure back insurers to its pharmacy-benefits management services.

“We tell our [insurance] clients that these members have to be in one of our channels to get the value of these programs,” said Jonathan Roberts, CVS’s chief operating officer. “There will be a share shift that comes as clients adopt these programs, and we demonstrate our ability to lower overall health care cost.”

As store sales have slowed for both CVS and Walgreens, which combined filled more than three billion U.S. prescriptions in 2016, the two companies have worked to beef up their prescription-drug businesses. The already pitched competition between the pharmacy giants could intensify as new rivals look to enter the fray. Earlier this year, Amazon.com Inc. was reported to have hired a team to develop a strategy for breaking into the pharmacy market.

Given that treatment of chronic diseases comprise roughly 70% of the $4 trillion spent annually in the U.S. on health care, any effort to combat the problem is welcome, said Mark Fendrick, a University of Michigan physician and professor focusing on chronic-disease management.

Getting patients to take their medications properly and consistently is a major problem in managing the conditions, said Dr. Fendrick, and one legions of experts over the years have failed to solve.

“There is a lot upside given the low adherence, so it comes as no surprise to see any large pharmacy to get more actively involved in providing care,” Dr. Fendrick said.

One concern of medical professionals is that providing medical services outside a patient’s regular network of doctors could lead to gaps in their records. CVS said it shares the results with patients’ health providers that use the same record-keeping network, provided the patient consents.

In addition to diabetes, CVS will roll out programs over the next two years to manage asthma, hypertension, hypercholesterolemia, or high cholesterol, and depression.

People in the diabetes program get one-on-one support and coaching by phone and at CVS pharmacies and MinuteClinics, generally staffed by physician assistants and nurse practitioners, for no out-of-pocket cost. They also receive a glucometer that measures and shares blood glucose levels digitally to CVS, which can then help head off complications or intervene when issues arise.

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