CVS
#Thanks.
Well, <UNK>, it's <UNK>.
I'll start and I know others will jump in here.
<UNK>, your answer to that in part lies in terms of the client makeup and the client adoption of those differentiated services.
So a client who is adopting Maintenance Choice, and it's a new client, obviously we're going to see a rapid uptake of share coming into one of our distribution channels because that's the nature of that plan design.
I think if you go back ---+ and, again, reflecting on some of the things we talked about at Analyst Day, this past year, a big piece of that new growth is in the health plan segment.
And as you look at our enterprise share of those health plan clients, it's in the low 20%s, so obviously that creates a big opportunity.
And that's something that will occur at a much slower rate than a client who adopts Maintenance Choice.
So obviously, a lot of opportunity and opportunity that we'll see cascade over the life of that contract.
<UNK>, this is <UNK>.
I think that's right.
I would just caution you a little bit.
If you look at the sales wind, certainly as we cycle into 2016 largely health plan, health plans as <UNK> articulated earlier, takes a while for them to sell in their programs.
So obviously the name of the game here has been let's gain the life and then, quite frankly, make the life more productive as we move some volume into our channel and save the client money.
In health plans that just takes a little longer.
I'll think the ramp of that will ---+ the slope of that was a little ---+ it's not as steep as in compared to the employer clients.
Yes, <UNK>, this is <UNK> here.
I do think the market is still pretty fragmented, so I do think there's file-buy-type opportunities within the market space and you'll see us continue to probably do that within the long-term-care business.
And then I think as you look at the long-term-care business, you kind of need to look at it in different client categories.
I think from a skilled nursing facility perspective, it's all about growing the number of beds.
I think from an assisted living facility is really designing products and solutions that capture more of those members within the beds that we have while, adding beds as well.
But there's more of a, let's say, a product development set that needs to happen there for share capture and share gain.
<UNK>, I think the only thing I'd add, it goes back to <UNK>'s question earlier, that we've spent enough time with the long-term-care clients to understand their pain points and their needs.
And that's what's driving some of the pilots that we have underway.
And I do believe that recognizing that to some degree long term care is episodic.
And you've got 2 million patients that are being discharged each year back into the home.
And being able to provide differentiated services for the client, the facility operator, and then, again, be able to follow those patients across their continuum of care is a significant opportunity to grow share.
And again, that will continue to evolve over time, over a multi-year period.
But I think we're excited by the opportunities that we see there.
Hi, <UNK>, this is <UNK>.
So Hep C volume I think has leveled off as we're into 2016, down a little bit from where we were last year.
Merck launched their new product at a list price of $54,000 and that is less expensive than the other products on the market like Harvoni.
So we'll evaluate these new products and negotiate the best deal for our clients and we continually evaluate our formulary selections and we'll do the same as these new products come to market.
I think as we look out to 2016 or 2017, we haven't seen a lot of treatment in the Medicaid space.
They've had real stringent utilization programs, so I think the question is as these drugs become more affordable, can we begin to see more treatment in that area.
And CMS came out with guidance actually encouraging the Medicaid providers to do that.
So, yes, you could potentially see an uptick in treatment if we see that movement from the Medicaid plans.
I think as far as specialty, we see clients very interested in doing more to manage specialty under the medical benefit.
It is not being well managed today, so we have a tool if they don't want to move it over to the pharmacy benefit, that's Novalogix, we have over 30 million members that we're managing with that tool today.
And it brings all of the management we have on the pharmacy side, but we also have an opportunity to move specialty from the medical side into the pharmacy benefit.
And, yes, not that you'll ever get the majority of it over there but there are opportunities to do more.
Yes, <UNK>, the 32% growth does include the ACS, the specialty component from Omnicare.
It was a relatively small piece of the growth.
And I'll ask <UNK> to comment in terms of the market reaction to Specialty Connect.
Specialty Connect really opened up a pain point in specialty that exists in the marketplace today and that's access, so now a specialty patient can walk into any one of our 9,600 retail pharmacies and get the same high levels of service because we've integrated into our back-end specialty platform ---+ you get the same high levels of service.
We see similar adherence, so it is, it has been favorably received by specialty patients.
And how we know that is it acts very similarly to Maintenance Choice.
We see half the patients want to pick up their specialty prescription at their local CVS that are using Specialty Connect and the other half want it mailed to their home.
So it really opens up the convenience so for our clients where we are the exclusive specialty provider, it enhances service.
It's enhancing revenue from the open market where we're competing with other specialty pharmacies, so physicians that are much more active in referring patients in the specialty space than in the non-specialty space like the capabilities and the service that we deliver.
So we think it's a real competitive advantage in the marketplace.
Well, it was 50% ---+ of the members that are coming through Specialty Connect, 50% of them want to pick up their specialty scripts at CVS pharmacy, so just to be clear it's not 50% of our overall volume.
And, <UNK>, the other thing I'd just point out as a reminder, this gets back to our focus on managing the CVS Health Enterprise, because from a financial point of view, everything that <UNK> articulated, whether the point of access is the retail pharmacy, from a financial point of view, it goes through the PBM segment.
And we aren't worried about in this example, you could say we're penalizing the retail pharmacy.
We don't look at it that way because we believe that it's a unique and integrated product that is allowing us to capture incremental share in the market which is good for the CVS Health Enterprise.
<UNK>, this is <UNK>.
Back to your original question about ACS.
If you look in specialty, for the full year growth rate was approximately 34%, if you excluded the specialty that came through ACS through Omnicare, growth would be above 30%.
So fairly small impact from a growth-rate perspective, most of the growth is coming from the core.
Yes, I would just say overall, I'd say things are holding fairly steady.
We certainly have seen the consumer ---+ I wouldn't say any change really from what we were seeing in the fourth quarter.
I think the big thing we've been focused on and continue to focus on is being smart about where we invest our margin dollars, so you can see us continue to downplay our circulars and really focus on ExtraCare, which is allowing us to find those high value customers and make sure they're coming into our stores.
Yes, well from a cadence perspective, a lot ---+ I'll point you back to a couple slides that I put together at Analyst Day back in December.
But it really relates back to, one, is the acceleration of growth from a Medicare Part D perspective and as that growth occurs, those profits are back-half weighted, so that clearly tilts the cadence delivery, profit delivery, to the back half versus the first half.
Secondly, we have several initiatives underway, both as we look at the acquisitions but more importantly as we look at different efforts that we have across our business.
Many of those initiatives deliver benefit in the back half versus the first half and probably most importantly is the timing and cadence of break-open generics.
Those are largely back-half weighted so you'll see the impact of that flow through in three and four versus Q1 and Q2.
So those are the major elements of how to think about that.
And we have not broken out specifically the percent of front half versus second half.
You're welcome.
Charles.
Okay, why don't we go on to the next one, maybe Charles will get back in the queue.
Well, <UNK>, it's <UNK>.
Let me take the last question and then I'll flip it over to <UNK> back to the first question.
I'm going to go back to a slide that we had at Analyst Day that showed that ---+ and I mentioned this in response to an earlier conversation.
The health plan business that came online last month, we have 22% share across our distribution channels.
When we look at the overall health plan enterprise share, it's right around 28% for existing health plan clients.
So, again, there is an awful lot of white space, as we've been talking about, in terms of opportunities to grow that, acknowledging that that growth is over time.
We talk a lot about the fact that when you look at the employer segment, with the stroke of one signature the Head of HR or the Head of Benefits can make a decision that several thousand employees are governed by.
And as we've been talking this morning, it works a lot differently across the health plan space.
So with that context, I'll flip it over to <UNK>.
Yes, so with our health plans, they have their own downstream clients and their downstream clients are no different than our clients that pharmacy is a bigger part of their health care spend than its ever been and it's the fastest growing part of their healthcare spend.
So they're very interested and motivated to sell our products and services that better manage these costs.
What we have been able to do over the last 12 months to 18 months is actually create financial incentives for the health plan sales team to actually create compensation for them as they sell these programs in, so their clients win, they win and we win.
So we think we've got very good alignment with our health plans now and they are very motivated, based on what's happened in the marketplace over the last several years, to get these plan designs implemented.
And, <UNK>, your other question just does the election have any impact in terms of how clients look at this.
I don't think it does.
I think whether it's a health plan client, an employer client, everyone is focused on, how do I provide the right level of service for my members at the lowest possible cost.
So I think what we're seeing play out every night on TV I think is kind of irrelevant to their goals and objectives.
Yes, <UNK>, I think it does because we've got products and services that I know as our Head of Sales talks about, I could remember years ago when I was out selling the dream of what we might be able to do and today I'm selling the results of what these products do.
So they've been proven to ---+ when we think about access, quality and cost, we can sit down and quantify those benefits around each.
Yes, Steve, it's <UNK>.
When you look at ---+ keep in mind this is now probably 10 years in the making that as you look across the states about half of the states have already implemented some type of acquisition cost-based reimbursement or managed Medicaid.
So they're immune to AMP, and I think it's consistent with what we've been talking about that the objective of AMP, we have been seeing for the last several years in the form of reimbursement pressures.
I think as you look at the remaining states, they will be ---+ it's our understanding that states will have 12 months with which to implement some type of acquisition reimbursement, acquisition cost reimbursement model and along with corresponding changes and dispensing fees.
So I think as we sit here today, we believe that the rollout across the rest of the country with this will be immaterial to our results.
But, again, I think that's going to play out on a state-by-state basis, acknowledging that states that have implemented that have made adjustments in dispensing fees, so more to come on that.
You know what, Steve.
I guess I'd answer that question by saying nice try.
Okay.
We'll go ahead and take two more questions.
Well, this is <UNK>.
We stand by our guidance.
As we look at the trends going through where we are today, we see nothing that's any different.
Again this continues to be an evolving marketplace driven largely by the mix of our business.
Medicare and Medicaid continues to accelerate and grow more rapidly than some other lines of business.
Secondly, as we indicated before, with a large win in the health plan business from a PBM perspective, the adoption of those programs that move share into our channel just take longer, it's longer for those to mature and for that adoption to occur.
And so the offsets as we think about 2016 are just not available to us.
This is <UNK>.
We made a decision several years ago that health plans were going to be an important growth vehicle for us, particularly when you looked at the growth coming from Medicare and Medicaid.
So we work hard to keep our health plans competitive in the marketplace, so we aren't really seeing repercussions or halo to pricing in the marketplace from that event.
I think it continues to be competitive but rational and I don't expect there to be an impact.
Thanks, Bob.
Final question.
Yes, <UNK>, it's a great question.
And as we've stated previous, this past summer we completed the rollout of our epic EHR across all of our clinics and that does a couple things for us.
One, is it does provide an infrastructure that allows us to expand our scope of ---+ and broaden our scope of practices.
And you're beginning to see that now as we're getting into the treatment of some additional conditions.
And that does create a tighter interface with the health system affiliations where we can transmit the information around a particular patient in a seamless fashion, so we're beginning to get some traction in terms of triaging patients across the delivery of care.
Yes, we've said that we had that target of 1,500 clinics.
I think with the acquisitions, we may not hit that number by 2017.
Obviously, we're going to be focusing on the Target integration, which includes about 80 clinics this year, so we may be a year or two behind that original target of 2017, but we continue to be comfortable with the rollout.
As a matter of fact, as we sit here today, about 50% of the US population actually lives within 10 miles of a Minute Clinic.
Okay, thank you.
And let me take a minute to thank everyone for your continued interest in CVS Health.
And as always, if anyone has any follow-up questions, you can contact <UNK> <UNK>.
Thanks, everyone.
