CVS Health reports 10% sales lift in 2015

WOONSOCKET, R.I. — CVS Health on Tuesday posted $41.1 billion for the fourth quarter ended Dec. 31, up 11%. For the year, CVS took in $153.3 billion, an increase of 10%. 

 

"We enjoyed a successful year in 2015, highlighted by excellent performance across our enterprise and two key acquisitions that support our strategy for growth," stated Larry Merlo, CVS Health president and CEO. "We grew our core business with the acquisition of Target’s pharmacies and clinics and expanded our reach with the acquisition of Omnicare, the leader in long-term care pharmacy. At the same time, we achieved solid year-over-year growth in revenues, operating profit and earnings per share," he said. "We continue to win and gain share across our businesses and I’m very pleased with the outstanding PBM selling season we had for 2016, with gross client wins of $14.8 billion. Our growth in the fast-growing specialty market continues to outpace the industry. Overall, our leadership in multiple competencies enables us to provide superior value for patients, payers and providers. We firmly believe that we have the right strategy for success in the evolving health care marketplace.”

 

Revenues in the Pharmacy Services segment increased 11.1% to $26.5 billion in the three months ended Dec. 31, 2015. This increase was primarily driven by growth in specialty pharmacy, which includes the impact of the Omnicare acquisition in August 2015, and pharmacy network claims. 

 

Pharmacy network claims processed during the three months ended Dec. 31, 2015, increased 7.2% to 237.4 million. The increase in pharmacy network claim volume was primarily due to net new business. Mail choice claims processed during the period increased approximately 3.9% to 22.2 million, compared to 21.3 million in the prior year period. 

 

For the year total net revenues in the Pharmacy Services segment increased 13.5% to $100.4 billion.

 

Revenues in the Retail/LTC segment increased 12.5% to $19.9 billion in the three months ended December 31, 2015. Approximately half of the increase was driven by the addition of long-term care operations acquired as part of the Omnicare acquisition. 

 

Same-store sales in the quarter increased 3.5% over the prior year period, with pharmacy same-store sales up 5% and front-store same-store sales down 0.5%. Front-store same-store sales were negatively impacted by softer customer traffic, partially offset by an increase in basket size. 

 

Pharmacy same-store prescription volumes rose 5% on a 30-day equivalent basis. Pharmacy same-store sales were negatively impacted by approximately 470 basis points due to recent generic introductions. 

 

For the year, total net revenues in the Retail/LTC segment increased 6.2% to $72 billion. Same-store sales increased 1.7% for the year, with pharmacy same-store sales up 4.5% and front-store same-store sales down 5%. Front-store same-store sales would have been approximately 520 basis points higher if tobacco and the estimated associated basket sales were excluded from the year ended Dec. 31, 2014.

 

For the three months ended Dec. 31, 2015, the generic dispensing rate increased approximately 165 basis points to 83.7% in the company's Pharmacy Services Segment and increased approximately 155 basis points to 84% in CVS' Retail/LTC Segment, compared to the prior year.