CVSCaremark2012 AR

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With Mark Cosby, President CVS/pharmacy; Jon Roberts, President CVS CaremarkPharmacy Services; and Troy Brennan, Chief Medical Officer

We recently had a chance to speak with three of CVS Caremarks top executives on a variety of topics, including

the progress made on the companys integrated offerings. Below are excerpts from that conversation.

Questions

and Answers

Troy Brennan, M.D.Chief Medical Officer

Q:With the three of you together, this seems likean appropriate time to discuss the companys inte-

grated offerings. Can you provide an update on how

they are being received?

JON ROBERTS:Initiatives like Pharmacy Advisor and

Maintenance Choice are good examples of how we

have brought our PBM and retail pharmacy assets

together to improve access, cost, and quality. Take

Pharmacy Advisor, which is our leading clinical program

for addressing issues with adherence and gaps in care.

The pilot program we launched for diabetes patients

was highly successful, and the program has grown

to address 10 different chronic conditions today.

These programs continue to be well-received by our

PBM clients.

Q:Can you quantify Pharmacy Advisors resultsin any way?

MARK COSBY:Over the last two years, we have

delivered more than 3.8 million live interventions to

members. The results of the program so far are

impressive. For example, were seeing a 4 percent

improvement in the number of patients who are

optimally adherent compared to those not enrolled in

the program. Were also seeing a 17 percent decrease

in gaps in care. With more patients taking their medica-

tions and taking them correctly that can only lead to

better health outcomes.

TROY BRENNAN:Our data shows that clients who

implement both Pharmacy Advisor and Maintenance

Choice are seeing significantly better results in areas

like generic dispensing and medication adherence, as

well as lower gross cost per eligible member. In fact,

when we looked at the retiree population for two of our

larger employer clients, costs fell by around 15 percent.

Q:Lets talk about Maintenance Choice. Why isthis program so unique and how is it being received?MARK COSBY:Like Pharmacy Advisor, this is another

offering that no standalone PBM or retailer has matched.

It gives qualifying plan participants the option of filling

their 90-day maintenance prescriptions by mail or at

one of our CVS/pharmacy or Longs Drugslocations.

Its about choice and access. If you make it easier for

C V S C A R E M A R K 2 0 1 2 A N N U A L R E P O R T6

Mark CosbyPresident

CVS/pharmacy

Jon RobertsPresident

CVS Caremark

Pharmacy Services


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people to get their medications, they are far more likely

to take them. It also points out the fact that not all

drugstores are created equal.

JON ROBERTS:Again, the adoption rate has been

tremendous. The program has gone from just under

11 million members in 2012 to nearly 16 million in 2013.

Many new PBM clients are adopting Maintenance

Choice right out of the gate. Adoption has been helped

by our recent rollout of Maintenance Choice 2.0. This

new version of the program enables clients with either a

mandatory or a voluntary mail plan design to participate

and achieve cost savings.

Q:PBM models, which have been relatively similarin the past, appear to be diverging. Why is CVSCaremark confident that its PBM/retail integrated

approach will succeed?

JON ROBERTS: When you look at CVS/pharmacys

share of our PBM book of business, you can quickly

grasp the value of our model to the overall enterprise.

In 2007, CVS/pharmacy had about an 18 percent share

of our PBMs retail network claims. That percentage

has grown to 31 percent, an increase that significantly

outpaces the growth in CVS/pharmacys overall retail

market share. PBM plan members are choosing CVS/

pharmacy because we provide unmatched offerings at ahigh level of service, which save them money and keep

them healthier.

TROY BRENNAN:Were not suggesting that ours is

the only model that will work, but were confident in

our approach for a lot of reasons. For example, the

growth areas of Medicare, Medicaid, health insurance

exchanges, and accountable care organizations will

require a broader set of capabilities than those that

are available under the traditional PBM model. These

growing segments are also not as reliant on mail order,

so they offer a greater opportunity for us to influenceconsumer and patient behavior at the local level.

MARK COSBY:As health care becomes increasingly

consumer-directed, local presence will become increas-

ingly important. We have more than 7,400 retail locations,

and more than 72 percent of our PBM members live

within five miles of one of our drugstore locations.

Q:Health care appears to be migrating to amuch more integrated system, with stronger links

between payors, providers, and patients. How are you

positioning CVS Caremark under this new paradigm?

TROY BRENNAN:Weve been preparing for this across

our businesses. At MinuteClinic, the drive to increase

connectivity is already well underway. In fact, the integra-

tion of electronic medical records is one of the key

drivers behind the affiliations MinuteClinic has been

forming over the past couple of years with health

systems across the country. Ill give you a quick example

of how this works. When a patient is treated at one

of our locations, the nurse practitioner can access

his or her medical record from the local collaborating

health system and identify any medication allergies thatcould impact treatment. After treatment, that patients

MinuteClinic record is transmitted directly into the

health systems electronic record for physician continu-

ity and potential follow-up. Its all done seamlessly.

JON ROBERTS: Lets look at a PBM member well

call her Anne who walks into a CVS/pharmacy to pick

up her statin prescription. The pharmacist may receive

an alert that Anne should get a cholesterol test. Anne

can go right from the pharmacy counter to MinuteClinic

for the screening and get her results immediately.

Taking advantage of our new connections throughhealth information exchanges, we can also send a

complete record of all these interactions to Annes

primary care provider.

TROY BRENNAN:We are also working to provide

seamless integration for at-risk providers. Our collabo-

ration with HMSA, the Hawaii Blue Cross Blue Shield

program, is a good example of that. HMSA has been

moving to the patient-centered medical home model.

Were preparing to send all of our adherence and gaps

in care-based messaging through the health informa-

tion network that HMSA has designed for the medicalhomes. Our Longs Drugs pharmacists in Hawaii will be

reiterating the same messages to patients through the

Pharmacy Advisor program. Were also going to open

up several MinuteClinics in Hawaii to support the

medical homes and provide the high level of informa-

tion exchange Ive already touched upon. Its a very

exciting partnership and a sign of the direction in which

health care in the United States is heading.

C V S C A R E M A R K 2 0 1 2 A N N U A L R E P O R T7


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Through our distinctive pharmacy care model, CVS Caremark

is enhancing convenience and access, lowering costs for

payors and patients, and achieving better health outcomes.

It begins with our unmatched purchasing scale, which we

leverage to save clients and customers money. Through our

deep understanding of consumer behavior and clinical exper-

tise, we also drive best-in-class interventions across all our

channels. Unlike other PBMs, we have more than 7,400 retail

stores through which we engage members face-to-face and

offer unique plan designs that drive better outcomes. By

combining our mail and retail capabilities, CVS Caremark is

also able to give patients greater access and choice on how

they obtain their prescriptions. These key differentiators add

up to a powerful competitive advantage that is helping drive

share gains across our businesses.

Were creating a new modelfor pharmacy care.

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Documents

CVSCaremark2012 AR