CVS Health Signs Support Services Deal with Anthem
CVS Health (NYSE: CVS – $74.00) announced a five-year agreement with managed care provider Anthem, Inc. to provide services to support IngenioRx, a new pharmacy benefit manager formed by Anthem. As part of the agreement, CVS’ Caremark unit will manage certain services for IngenioRx, including claims processing and prescription fulfillment. In addition, CVS Health’s bundled suite of assets, including CVS Pharmacy and MinuteClinic, allow the company to apply its expertise in patient messaging and engagement at the point-of-sale to support IngenioRx, broadening the scope of clinical services offered at the pharmacy counter to drive better outcomes. The new agreement, which goes into effect on January 1, 2020, runs through December 31, 2024.
Finally some good news for CVS, as it has been a market laggard for most of the year. Amazon.com’s announcement that it is going to be entering the pharmacy fulfillment space has been partly to blame along with some contract losses for the company’s Caremark segment and slowing traffic at its retail outlets. The company’s size and healthy cash flow, however, should help it maintain market share regardless of the competition and at current levels, the shares offer wide appreciation potential.