CONSUMERS could see lower prices on prescriptions at CVS this year after a promise from CEO David Joyner.
Joyner blasted the increased costs the healthcare industry has seen recently, specifically from pharmaceutical manufacturers.
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“Rising healthcare costs put pressure on consumers as they see increasing challenges with affordability,” he noted in a fourth-quarter earnings call this month.
The CEO cited “greater utilization, rising provider costs, labor shortages, and dramatic price hikes for branded pharmaceuticals” as the leading causes of the increases.
That’s why CVS is planning to use a variety of “tools” to work at providing “exceptional value and differentiated experiences” despite the healthcare costs, according to Joyner.
That includes the continued use of Caremark, its Pharmacy Benefit Manager.
PBMs are companies that specifically act as managers of prescription drug benefits and work between manufacturers, insurers, and customers, per the Center for American Progress.
They help decide which drugs consumers can get ahold of the easiest and at what price through insurers.
PBMs are essentially negotiators and will ultimately “determine the prices insurers pay and the payments pharmacies receive.”
CVS Caremark helps determine prescription costs for customers.
It also ensures they receive items that are safe and effective, per a dedicated page on the company’s website.
PBMS TO THE RESCUE
“These entities remain the only part of the drug supply chain entirely focused on lowering costs…” Joyner said on the earnings call.
“For more than three decades, PBMs have been a proven unequivocal mechanism to negotiate down the price of drugs for payers and consumers while promoting better adherence and better health.”
The CEO blasted some branded drug manufacturers with limited PBM tools, citing “egregious price hikes” and a $21 million spike in “annual gross drug spend” in January 2025 alone.
“Our work is critical a critical counterbalance to the monopolistic tendencies of drug manufacturers,” he said of Caremark.
“No one has demonstrated more success than the PBMs at driving down drug prices.”
That’s why Caremark will be enabling true cost and cost advantage models.
CVS closes 900 stores
CVS Health is finishing up its three-year plan to close 900 stores.
CEO Karen Lynch said it has shut down 851 so far, The Associated Press reported in August 2024.
The company announced the plan in November 2021, saying that the closures would lead to a retail presence that ensures it has the “right kinds of stores in the right locations for consumers and for the business,” per CNN.
The shutdowns amount to almost 10% of CVS’s footprint, in response to the shifting of “consumer buying patterns.”
The closures are part of a wider change in strategy of the company’s almost 10,000 locations.
Some stores have been removed to include more health services, such as primary care, and an “enhanced version” of CVS’s HealthHub layout.
“We remain focused on the competitive advantage provided by our presence in thousands of communities across the country, which complements our rapidly expanding digital presence,” Lynch said in 2021.
The shutdowns cost the company approximately $1 billion dollars in the fourth quarter of 2021, according to CNN.
Both help patients see lower costs for prescriptions.
JOBS IN JEOPARDY
CVS has also been making other aggressive cost-cutting strategies, including the axing of 2,900 staff and store closures to save around $2 billion.
In July 2023 it was announced that around 5,000 jobs would be cut.
Former CEO Karen Lynch had also hinted at the time toward the company’s intention to make more technology investments, per the Wall Street Journal.
Lynch had also announced in 2021 that CVS planned to close around 900 stores over three years.
Around 851 were shuttered as of this past August — with 300 in 2022, another 300 in 2023, and the final 300 last year — per what the ex-CEO told The Associated Press.
The store count is about 10% of CVS’ retail footprint.
Joyner was recently appointed CEO in mid-October 2024.
An expert recently told The U.S. Sun in an exclusive conversation that CVS and Walgreens closures could spark a “crisis” for 15.8 million Americans.
CVS also admitted that some customers “really dislike” a new anti-theft measure.
