CVS Growth: Too Big To Be Healthy

Is what’s good for CVS good for consumers?

CVS is growing faster than rabbits at breeding time. CVS is the primo player in the Health Care/Pharmaceutical Drug Industrial Complex. Consumers need to beware of how the CVS business model affects drug costs and availability, as shown in two recent NYT articles.

Why CVS Quit Smoking details how CVS is “…the country’s biggest operator of health clinics, the largest dispenser of prescription drugs and the second-largest pharmacy benefits manager. With close to $140 billion in revenue last year…CVS is arguably the country’s biggest health care company, bigger than the drug makers and wholesalers, and bigger than the insurers.” *

When Getting a Refill Is a Battle covers specialty pharmacies whose growth needs specialized attention from regulators: “Interviews with patient advocates and doctors suggest that specialty pharmacies do not always live up to their billing. [Nice pun.] There can be onerous refill policies that require hours on the phone, shipments that are delayed or error-ridden, and difficulty reaching a pharmacist or other representatives.” **

CVS growth is spurred by acquisitions of suppliers and competitors now deployed in five overlapping areas:

–Retail Pharmacies: Conventional drug stores with prescription services designed to build traffic aimed at purchases of retail items.

–Direct Response: CVS/Caremark is an alternative prescription provider through phone, mail order and Internet services.

Generics: CVS is the major provider of generic drugs, many of which are proprietary.

–Non-Critical Health Service: In-store clinics for conditions not requiring a licensed doctor.

–Insurance: SilverScript is CVS’s entry into the insurance industry.

CVS’s rapid growth may be good for CVS, but it seems not good for consumer health. Growth generates profits and bureaucracy. CVS needs contingency planning and spending in advance of and its projections for growth in customers and health products. In other words, build the dikes before the floods.

At the moment, CVS is taking the same path as many near-monopolies that cut labor costs by “evolving” customer service into customer self-service systems. That works for stopping mail or making an airline reservation, but not for getting assistance with drug prescriptions.

Current CVS/Caremark policies illustrate CVS corporate disdain for consumers. CVS/Caremark’s customer service workers are not allowed to call back, email or fax answers to questions from callers. Instead, callersmay endure long waits while operators try to find someone who may—or may not—be able to answer a question or correct a prescription. And if the search involves reaching a higher-level person who is busy, the customer must wait. CVS surely knows—may even hope—many callers will terminate their calls, which allows CVS to show the call as voluntarily ended. (Even pharmacists in different CVS retail stores I use are frustrated when trying to get answers from CVS/Caremark.)

CVS is on a mission to prevent renewal of last year’s generics, perhaps to convert customers to a new generic coincidentally owned by CVS. The generics may work as well or better than the generics they replace—but the process eliminates the doctor who originally wrote the prescription.

Consumerist Questions for CVS:

Who at CVS decides which new generic should replace a previously doctor-prescribed generic? Is the new generic better than the old for me or for CVS? Why not ask the patient’s doctor before changing the generic?

30 years ago Ronald Reagan’s Surgeon General warned of the cancer connection to cigarettes. What took CVS so long to do something so right? Did corporate profitability trump consumer health until 2014?


* Hiroko Tabuchi, Sunday Business section, New York Times, 12 July 2015, pages 1 and 4.

**Katie Thomas and Andrew Pollack, New York Times Business Day, 16 July 2015, pages 1 and 6.



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