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Capitalizing on the Retailization of Health Care Helena Foulkes Executive Vice President & President, CVS Pharmacy Agenda Retail Pharmacy Partnering Through Enterprise Capabilities Update on Key Assets Front Store Growth Strategy 2 RETAIL PHARMACY Retail Pharmacy at a Glance Estimated 2016 CVS Pharmacy Revenue 25% Front 75% Store Pharmacy 3 RETAIL PHARMACY Strong Record of Pharmacy Share Growth Over the Past Several Years CVS Pharmacy Share of Total U.S. Retail Prescriptions +300 bps 23.8% 20.8% 2013 Sep YTD 2016 Sep YTD 4 Refer to endnotes for additional information. RETAIL PHARMACY Significant Presence in the U.S. Retail Pharmacy Market Size and Scale • 9,600+ retail locations • More than 1.1B retail scripts filled annually We own the last mile through our unmatched patient touchpoints and high frequency of consumer interaction 5 Refer to endnotes for additional information. RETAIL PHARMACY A Strong Track Record of Leading Performance Medication Possession Ratio +580 +340 +610 bps bps bps 84.9 83.5 80.6 79.1 80.1 74.5 Diabetes Hypertension High-Cholesterol Top Competitors CVS Pharmacy We deliver best-in-class clinical outcomes to all patients 6 Refer to endnotes for additional information. RETAIL PHARMACY Our Success Is Driven by Integrating Clinical Programs Into Our Workflow System PATIENT CARE – GAP IN CARE An Integrated Approach Smith, John Phone Number: 123-456-7899 DOB: 01/01/1900 Age: 56 Years Gender: Male Txt Message: Not added Instructions: Confirm patient has gap in care and discuss reasons to close therapy • Our history with CVS Caremark gap. If creating prescriber request, always confirm the correct prescriber to contact with the patient. has focused us on outcomes Your pharmacist would like to speak with you today about a potential gap in your care • We have built clinical programs into our workflow If you have diabetes, its important to speak with your doctor about the best ways to manage your condition • Common long-term effects of diabetes can include reduced heart rate function • This ensures that performing • Statin therapy may help prevent this complication • Since we do not see a statin medication in your profile, we can contact your doctor to clinical programs is a key priority review this information • Your doctor will determine if a statin therapy is appropriate for you We are now leveraging these “clinical pipes” with other PBMs and health plans 7 RETAIL PHARMACY Continuing to Innovate in Our Patient Communications and Adherence Programs Pharmacy Innovation Team … and Has Developed Dozens of Focuses on … Programs, Including: Right Outreach Right Patient Mobile Insurance ScriptSync Rx Pickup Card Texts Right Medium Right Time Rx Mobile 30- to 90- Expiration In-store Day Switch Texts Beacons Texts We have a suite of personalized adherence tools to better deliver clinical programs 8 RETAIL PHARMACY ScriptSync Drives Adherence Through Improved Convenience Patients picking up multiple 73% 1.5M+ prescriptions per month can accept offer enrolled since now coordinate refills and to enroll launch improve adherence 6 percentage point lift in medication possession after enrollment Allows us to solve a consumer pain point AND provide added value to PBM and health plan partners 9 Refer to endnotes for additional information. Our Text Alerts Are Easier for Patients and Our Teams We are Driving Adoption … … and an Innovative, Integrated Experience Adherence text Your insurance Your Rx may Restock on-hand messages sent card is not on file have expired medications for back-to-school 600M 85% CAGR 175M Text us a photo Text us to contact Text us to refill 2014 2016E of your card your doctor your medication We own the last mile and understand our consumers 10 Refer to endnotes for additional information. RETAIL PHARMACY Because of Our Unique Capabilities, We Have Grown Faster Than the Market Growth in Prescriptions (2013 – 2016, Sep YTD) 27% Nearly 55% of our growth ~4X through Faster non-Caremark 7% payors CVS All Other Pharmacy Market 11 Refer to endnotes for additional information. RETAIL PHARMACY A Majority of Our Scripts Are Non-Caremark CVS Pharmacy Scripts by PBM (Oct 2016 YTD) Other PBMs 65% 35% CVS Caremark and Payors We are committed to partnering with other PBMs by leveraging the assets of CVS Health 12 Agenda Retail Pharmacy Partnering Through Enterprise Capabilities Update on Key Assets Front Store Growth Strategy 13 Bringing Together Assets From All of CVS Health to Win With PBMs and Health Plans Cost Retail Management Tools Long-term Mail Care Retail Clinics Specialty Clinical Programs Infusion Patients Medical Digital Claims Payors Providers Editing …enabling us to deliver superior outcomes at a lower cost 14 We Deployed Select Assets for a Non-PBM Medicaid Payor Seeking to Drive Cost Efficiencies and Retention Cost Retail Management Tools Long-term Mail Care Retail Clinics Specialty Clinical Programs Infusion Patients Medical Digital Claims Payors Providers Editing 15 Non-PBM Medicaid Payor Saw Improved Clinical Results Cost Retail Management• Retail marketing to support Tools Long-term member retentionMail Care Retail Clinics Specialty Clinical • Customized clinical pilots Programs leveraging in-store and Infusion telephonic capabilities • Emergency roomPatients diversion Medical Digital outreach program Claims Payors Providers Editing Closed gaps for patients at a rate 2X higher than client expectations 16 For Another Non-PBM Client, We Used Our Clinical Programs to Improve Star Ratings Cost Retail Management Tools Long-term Mail Care Retail Clinics Specialty Clinical Programs Infusion Patients Medical Digital Claims Payors Providers Editing 17 Non-PBM Client Achieved Improvements in Star Ratings Across Multiple Plans • AdherenceCost and refill opportunities Retail Management executedTools and enabled: Long-term Mail Care − ReadyFill and 90-Day Retail − Care 1-on-1 Retail Clinics Specialty Clinical • Clinical interventions and future initiatives: Programs Infusion − Client clinical rules engine − ScriptSync Patients − CVS Pharmacy Clinical call center Medical Digital Claims Payors Providers Editing Assisted plan in improving Star rating from 3 to 4 and achieved 4% increase in adherence 18 CVS Health Is Launching a Strategic Relationship With Optum Cost Retail Management Tools Long-term Mail Care Retail Clinics Specialty Clinical Programs Infusion Patients Medical Digital Claims Payors Providers Editing …enabling us to deliver superior outcomes at a lower cost 19 CVS Health Is Launching a Strategic Relationship With Optum Partnering to Offer Employers a Goal New Pharmacy Network Option • Fill 90-day scripts at any CVS Pharmacy or via OptumRx home delivery By continuing • Help improve consumer engagement and help health to partner with outcomes by leveraging CVS Pharmacy’s unmatched clinical other PBMs and capabilities health plans we • Going forward, Optum and CVS Pharmacy will continue will grow our to develop new pharmacy and health solutions leveraging prescription our suite of assets share 20 Agenda Retail Pharmacy Partnering Through Enterprise Capabilities Update on Key Assets MinuteClinic Omnicare Target Front Store Growth Strategy 21 MINUTECLINIC MinuteClinic Footprint Covers Most Populous U.S. Areas • Fully integrated 79 Target clinic locations • > 50% retail clinic market share • Approximately three times 1,136 larger footprint than closest Total Clinics competitor Clinic State MinuteClinic More than 50% of the U.S. population is within 10 miles of a MinuteClinic 22 Refer to endnotes for additional information. MINUTECLINIC MinuteClinic Enhances the CVS Value Proposition to Patients, Providers, Payors and PBMs Patient Engagement Low-Cost Care Population Health and Access • Up to 80% less expensive • Address gaps in care with Investing in: than other sites of care providers, payors and PBMs • Scheduling tools and • MinuteClinic Savings • Provide health risk walk-in options Strategy can further reduce assessments/biometric • Expansion of primary costs screenings care services • Electronic record integration • Telehealth with health systems 23 Agenda Retail Pharmacy Partnering Through Enterprise Capabilities Update on Key Assets MinuteClinic Omnicare Target Front Store Growth Strategy 24 OMNICARE Omnicare Has Significant Growth Opportunities Omnicare Opportunities Share of Prescriptions (Oct 2016 YTD) • Achieving operational excellence across Omnicare footprint Skilled Assisted living and • Rolling out industry-leading nursing other communities transitions experiences 76% 24% • Serving assisted living and independent living communities with new integrated capabilities 25 Refer to endnotes for additional information. OMNICARE We Have Applied CVS Operational Excellence Across the Omnicare Footprint STAT Fill Additional Operational Improvements • STAT Fill Services now leverage • New workflow and intake process for national CVS Pharmacy network for assisted living move-ins urgent medication needs • Technology upgrades and • 77% of Omnicare-served senior living investments including: communities are within three miles of a − Labor scheduling tools CVS Pharmacy − Prescribing enhancements to staff workflow 26 OMNICARE Investments in Transitions Enhances Our Market Positioning Acute care hospital Reinvented Goal of reducing medication admission transfer time from ten hours to experience two and a half hours Skilled nursing Residential home Transitions Diverting hospital readmissions of care through greater pharmacy care solution oversight These new services will further reduce hospital readmissions
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