CVS Pharmacy Services Revenue up 10.6% for 2022

CVS Health’s pharmacy services business contributed $169.26 billion in revenue, up 10.6% from 2021, to the company’s 2022 financial results. This is a result of increased pharmacy claims volume and growth in specialty pharmacy, the company indicated in its recent financial statement.

The pharmacy services segment provides a full range of PBM solutions, including plan design offerings and administration, formulary management, retail pharmacy network management services, mail order pharmacy, specialty pharmacy and infusion services, clinical services, disease management services and medical spend management.

Total pharmacy claims processed 4.1% on a 30-day equivalent basis for 2022 compared with 2021. This increase is a result of new business, increased utilization, and the impact of an elevated cough, cold and flu season compared with the prior year, but was partially offset by decreased COVID-19 vaccinations. The company indicated that specialty pharmacy revenue more than more than 17%, which reflects new business and as well as inflation.

The company’s ability to deliver industry-leading drug trend for clients and the specialty management capability continue to drive growth, chief financial officer Shawn M. Guertin, said during an investor call.

Going forward, CVS executives expect revenue in pharmacy services to grow by 1% to 2% driven by generic and biosimilar launches but could be partially offset by lower Medicaid volume.

Karen S. Lynch

“As we enter 2023, the first wave of biosimilars will be coming to market starting with a competitor for Humira,” Karen S. Lynch, CVS Health president and chief executive officer, said in an investor call. “We recently announced that Amjevita would be available in our commercial formularies alongside Humira and other branded products. Our approach to biosimilars reflects our commitment to drive the lowest net cost for our clients while providing members coverage of clinically safe and effective medications and ensuring continuity of care.”

Across all divisions, CVS Health’s total revenue for 2022 increased 10.4% to $322.5 billion. “Last year was defined by outperformance across our foundational businesses, robust cash flow from operations and meaningful progress against our value-based care delivery strategy,” Lynch said.

The company also announced during the earnings call the acquisition of Oak Street Health, a value-based primary care company focused on Medicare, for about $10.6 billion. Oak Street Health employs about 600 primary care providers and has 169 medical centers across 21 states. By 2026, Oak Street Health will have more 300 centers. The acquisition is expected to close later this year.