CVS Health Corporation · NYSE:CVS

CVS Health — Investor Day (December 2014)

36 slides from CVS Health's investor day presentation, Dec 16, 2014

Slide 1: Reinventing Retail Pharmacy
Reinventing Retail Pharmacy Helena Foulkes Executive Vice President & President, CVS/pharmacy
Slide 2: Agenda
Agenda Achieving Strong Strong Core Performance Performance Driving Growth in Pharmacy and Health Reinventing the Front Store Investing for the Future ©2014 CVS Health 2
Slide 3: Strong Record of Market Share Growth Both Front and Pharmacy
Strong Record of Market Share Growth Both Front and Pharmacy Growth in Front Store CVS/pharmacy Share of Total U.S. (2009 – 2014) Retail Prescriptions +230 bps 1.5X 24% 21.0% 18.7% 16% Market CVS 2009 2014E Notes: 1. Market = remainder of MULO Note: 2. Compares 2014 YTD through October to 2009 Jan t
Slide 4: Continued Strength in Core Pharmacy Business
Continued Strength in Core Pharmacy Business Growth in Prescriptions (2009 – 2014) ~3X 39% 24% 12% % reduction in labor cost to 13% 3% fill each Rx since 2009 Other Oth Total T t l CVS/ h CVS/pharmacy Chain Drug Retail Notes: 1. Compares 2009 through October to 2014 YTD 2. All prescriptions dispense
Slide 5: Success in Key Businesses
Success in Key Businesses Health & Beauty Sales Key Examples Health ea sshare aeoof d drug ug cchannel a e up to 36% from 33% in 2009 30+% OTC Pain and Vitamins each up more than 30% last 5 years Nexium OTC at 1.7X fair share since launch Beauty share of drug channel up to 40% from 38% in 2009 17 mi
Slide 6: Success in Our Own Brands
Success in Our Own Brands Store Brand Penetration Key Examples Best in class penetration in core categories 25% ~25% • 46% penetration in OTC Pain • 35% penetration in Vitamins ~19% • 20 categories gained more than $1 million in sales year-over-year 16% Launch of new and exclusive brands • MUA launc
Slide 7: More Disciplined Approach to Promotion
More Disciplined Approach to Promotion Growth in Promotional Ad Blocks (year-over-year) 22% Our Advantage 12% 6% CVS/pharmacy Comp Comp A B Our focus: profitable sales growth Source: ECRM, 2014 YTD through October ©2014 CVS Health 7
Slide 9: Agenda
Agenda Achieving Strong Core Performance Driving Growth in Pharmacy and Health Reinventing the Front Store Investing for the Future ©2014 CVS Health 9
Slide 10: Serving as the Retail Pharmacy for Our Customers Regardless of the PBM
Serving as the Retail Pharmacy for Our Customers Regardless of the PBM Share of CVS/pharmacy Prescriptions 35% Deep Integration and Innovation CVS/caremark …with CVS/caremark Clients Customers Innovative Partnerships with Payors and Providers 65% Non-PBM C t Customers Best-in-class Clinical Programs
Slide 11: Best-in-class Clinical Programs for All Patients
Best-in-class Clinical Programs for All Patients Share of CVS/pharmacy Prescriptions Deep Integration and Innovation …with CVS/caremark Clients Innovative Partnerships with Payors and Providers Best-in-class Clinical Programs for All Patients ©2014 CVS Health 11
Slide 12: Enabling CVS/pharmacy to Deliver Best-in-class Adherence Results
Enabling CVS/pharmacy to Deliver Best-in-class Adherence Results Medication Possession Ratio Diabetes Di b t Cholesterol Ch l t l Blood Bl dPPressure Therapy Therapy Therapy +800 83 +800 bps 81 +800 79 bps bps 75 73 71 Top 3 CVS/ Top 3 CVS/ Top 3 CVS/ Retail pharmacy Retail pharmacy Retail pharmacy
Slide 13: Continuing Enhancement of Core Adherence Programs
Continuing Enhancement of Core Adherence Programs Identification • Enhanced identification and delivery − Expanded and tailored call windows Delivery • Preferred channel at the preferred time − Medication M di ti reminders i d via i ttextt message ffor th those who h prefer f it Intervention • More
Slide 14: Innovating to Help Our Patients Quit Smoking and Get Healthier
Innovating to Help Our Patients Quit Smoking and Get Healthier Smoking Cessation Example: Suzanne • Two relapses • CVS pharmacist – personal plan • 30-day follow-up After tobacco exit, our weekly nicotine replacement units are up by 30% Note: 1. 2014 YTD through October ©2014 CVS Health 14
Slide 15: Creating Innovative Partnerships With Health Plans, PBMs and Providers
Creating Innovative Partnerships With Health Plans, PBMs and Providers Share of CVS/pharmacy Prescriptions Deep Integration and Innovation …with CVS/caremark Clients Innovative Partnerships with Payors and Providers Best-in-class Clinical Programs for All Patients ©2014 CVS Health 15
Slide 16: Leveraging Retail Pharmacy Assets to Positively Impact Patient Care
Leveraging Retail Pharmacy Assets to Positively Impact Patient Care Hospital Bedside Medication Delivery Technician delivers medication at discharge Hospital and patient benefits: Pharmacist calls p patient’s • Addresses readmissions home to provide counseling • Increases patient satisfaction Pharma
Slide 17: Uniquely Positioned to Partner with Health Plans
Uniquely Positioned to Partner with Health Plans Ability to Pay Premium in Store In-store Events with No Fee Barcode- based solution for convenience Digital Tools Targeted Clinical Patient Care A1c reminder delivered by pharmacist ©2014 CVS Health 17
Slide 18: Developing Preferred Relationships with Plans that Leverage CVS Health Assets
Developing Preferred Relationships with Plans that Leverage CVS Health Assets and Capabilities PBM Clients Non-PBM Partners + CVS Health provides value to health plans, whether or not we are the PBM ©2014 CVS Health 18
Slide 19: Deep Integration Where We Are the PBM
Deep Integration Where We Are the PBM Share of CVS/pharmacy Prescriptions Deep Integration and Innovation …with CVS/caremark Clients Innovative Partnerships with Payors and Providers Best-in-class Clinical Programs for All Patients ©2014 CVS Health 19
Slide 20: Our Model Provides Unique Advantages for Our CVS/caremark Clients
Our Model Provides Unique Advantages for Our CVS/caremark Clients Member Benefit Collaboration to New Products and Transition Support Innovate for Members Services • Smooth transition for • Combined enterprise, • Piloting multi-dose patients & records retail and home solution solutions • Pharmacy te
Slide 21: Impacting Patient Health and Supporting Our Stakeholders
Impacting Patient Health and Supporting Our Stakeholders Share of CVS/pharmacy Prescriptions Deep Integration and Innovation …with CVS/caremark Clients Innovative Partnerships with Payors and Providers Best-in-class Clinical Programs for All Patients ©2014 CVS Health 21
Slide 22: Agenda
Agenda Achieving Strong Core Performance Driving Growth in Pharmacy and Health Reinventing the Front Store Investing for the Future ©2014 CVS Health 22
Slide 23: CVS/pharmacy Continues to Grow Despite Industry Headwinds
CVS/pharmacy Continues to Grow Despite Industry Headwinds Consumer Sentiment Index Growth in Sales Per Basket (year-over-year) 110 3.9% 100 3.3% 90 80 70 60 0 1/1/2005 1/1/2010 Overall Health and Beauty Notes: 1. All transactions are for TY vs. LY (Nov-Oct) 2. All numbers adjusted to exclude tobacco
Slide 24: Focus on Growing Health and Beauty Aligns Well with Drug Channel
Focus on Growing Health and Beauty Aligns Well with Drug Channel Health and Beauty Drug Channel has Higher Share Growing Faster in Drug Channel in Health and Beauty High 28% 27% Health Nexxt 3 years growth Beauty eauty Edibles 8% 4% GM Low Low High Edibles GM Beauty Health Last 3 years growth Source
Slide 25: Five Key Themes to Drive Growth
Five Key Themes to Drive Growth Be a L B Leading di Health H lth and d Beauty Destination 1 2 3 4 5 Better Health Elevate Beauty Customer- MyCVS Store Digital Made Easy Driven Innovation Personalization Investing for the Future ©2014 CVS Health 25
Slide 26: Better Health Made Easy: Destination for Health and Healthier Choices
1 1 Better Health Made Easy: Destination for Health and Healthier Choices Leverage Our Expertise to Bring Our Health Focus to Improve the Health OTC Edibles with Enhanced Healthy S Shopping Experience Food Choices C #1 $1 billion + • Investing in Growth Customer request after Total opportunity Categ
Slide 27: Elevate Beauty: Build on Our Strong Foundation
2 2 Elevate Beauty: Build on Our Strong Foundation Enhance the Beauty Shopping Bring our Health Expertise Experience to Beauty • Continue new & • Increased focus exclusive brand on Naturals and launches Healthy solutions • Create accessible specialty look • Capitalize on and feel clinical expertise
Slide 28: Customer Driven Personalization: Leading and Innovating
3 3 Customer Driven Personalization: Leading and Innovating 16 years of leadership …and we will innovate to in loyalty… y y personalize p % Personalized Offers 70M 90M+ 80 active personalized 4X ExtraCare mail members pieces 20 25M+ 38M personalized personalized Today Goal emails e a s coupons coupo
Slide 29: MyCVS Store: Poised to Capture the High-growth Hispanic Cluster
4 4 MyCVS Store: Poised to Capture the High-growth Hispanic Cluster The Hispanic Cluster is Key to Investing in Hispanic Cluster Our Future Growth Through Navarro Acquisition U.S. Hispanic Population Services Products (lives, millions) 71 57 Value Atmosphere 2015E 2025E More than 50% of growth in th
Slide 30: Agenda
Agenda Achieving Strong Core Performance Driving Growth in Pharmacy and Health Reinventing the Front Store Investing for the Future ©2014 CVS Health 30
Slide 31: Investing to Grow Both in Stores and Digital
Investing to Grow Both in Stores and Digital Stores Digital + ©2014 CVS Health 31
Slide 32: We Continue to Grow Our Footprint
We Continue to Grow Our Footprint ~2% Annual square + footage growth 200+ File buys ~150 Net new stores + ©2014 CVS Health 32
Slide 34: Connecting Customers to Everything CVS Health Offers through Integrated Experiences
Connecting Customers to Everything CVS Health Offers through Integrated Experiences Integrated Pharmacy The truly seamless retail retail, mail mail, specialty experience Integrated Health Tools Integrated Front Store Entry point into connecting Personalized products – people with health anytime, any
Slide 35: Transforming Digital at CVS Health is Underway with Strong Results
Transforming Digital at CVS Health is Underway with Strong Results Integrated Pharmacy • Top-rated app • 6 million new Rx users • 100% online growth Integrated Health Tools Integrated Front Store • ‘Next-in-line’ ‘Next in line’ texts • 2.5X 2 5X personalized growth • 14 million adherence text • Offe
Slide 36: Positioned for Today, Preparing for Tomorrow
Positioned for Today, Preparing for Tomorrow Strong national footprint /solid foundation in pharmacy Made the Right Moves ExtraCare program set the standard for excellence Best-in-class clinical programs for all customers Still … Onl Only CVS I t Integrated t d solutions l ti d deliver li even b bet

CVS Health — Investor Day (December 2014) on 6ix

CVS Health — Investor Day (December 2014)

Slide 1: Reinventing Retail Pharmacy

Slide 2: Agenda

Slide 3: Strong Record of Market Share Growth Both Front and Pharmacy

Slide 4: Continued Strength in Core Pharmacy Business

Slide 5: Success in Key Businesses

Slide 6: Success in Our Own Brands

Slide 7: More Disciplined Approach to Promotion

Slide 8: A Purpose-driven Brand

Slide 9: Agenda

Slide 10: Serving as the Retail Pharmacy for Our Customers Regardless of the PBM

Slide 11: Best-in-class Clinical Programs for All Patients

Slide 12: Enabling CVS/pharmacy to Deliver Best-in-class Adherence Results

Slide 13: Continuing Enhancement of Core Adherence Programs

Slide 14: Innovating to Help Our Patients Quit Smoking and Get Healthier

Slide 15: Creating Innovative Partnerships With Health Plans, PBMs and Providers

Slide 16: Leveraging Retail Pharmacy Assets to Positively Impact Patient Care

Slide 17: Uniquely Positioned to Partner with Health Plans

Slide 18: Developing Preferred Relationships with Plans that Leverage CVS Health Assets

Slide 19: Deep Integration Where We Are the PBM

Slide 20: Our Model Provides Unique Advantages for Our CVS/caremark Clients

Slide 21: Impacting Patient Health and Supporting Our Stakeholders

Slide 22: Agenda

Slide 23: CVS/pharmacy Continues to Grow Despite Industry Headwinds

Slide 24: Focus on Growing Health and Beauty Aligns Well with Drug Channel

Slide 25: Five Key Themes to Drive Growth

Slide 26: Better Health Made Easy: Destination for Health and Healthier Choices

Slide 27: Elevate Beauty: Build on Our Strong Foundation

Slide 28: Customer Driven Personalization: Leading and Innovating

Slide 29: MyCVS Store: Poised to Capture the High-growth Hispanic Cluster

Slide 30: Agenda

Slide 31: Investing to Grow Both in Stores and Digital

Slide 32: We Continue to Grow Our Footprint

Slide 33: Advancing Digital at CVS Health

Slide 34: Connecting Customers to Everything CVS Health Offers through Integrated Experiences

Slide 35: Transforming Digital at CVS Health is Underway with Strong Results

Slide 36: Positioned for Today, Preparing for Tomorrow