CVS Health Corporation · NYSE:CVS
CVS Health — CVS Caremark — Investor Day (December 2013)
27 slides from CVS Health's investor day presentation, Dec 18, 2013
Slide 1: Capitalizing On The Specialty Pharmacy Opportunity
Capitalizing On The Specialty Pharmacy Opportunity Alan Lotvin, MD Executive Vice President, Specialty Pharmacy Analyst Day December 18, 2013
Slide 2: Agenda
Agenda ! Strong growth in a growing market ! Differentiated offerings set us apart ! Expanding into the infusion market 2
Slide 3: Specialty Growing In Absolute Dollars And Percent Of Drug Spend
Specialty Growing In Absolute Dollars And Percent Of Drug Spend Total Industry Specialty Spend ($ billions) 235 17% CAGR 179 Pharmacy 127 92 Medical 2012 2014 2016 2018 Percent Of Total Spend 30% 38% 45% 50% Source: NHE, Artemetrx, CVS Caremark internal analysis, 2013. 3
Slide 4: CVS Caremark Specialty Growth Exceeds Market
CVS Caremark Specialty Growth Exceeds Market CVS Caremark Specialty Revenue ($ billions) 18% 26 CAGR 6 21 PBM Managed 18 6 20 5 16 13 Dispensed 22% CAGR 2012 2013E 2014E Notes: 1. Dispensed revenue includes specialty revenues dispensed at CVS/pharmacy 2. 2014 includes addition of Coram at end of fir
Slide 5: Specialty Medications Require Special Management
Specialty Medications Require Special Management Lisinopril Indication High Blood Pressure Multiple Sclerosis U.S. patient population 68,000,000 400,000 Financial Annual cost per patient $48 $54,000 burden Clinical Type Oral tablet IV infusion challenges Rare cough Rare fatal viral infection Side ef
Slide 6: Specialty Patients Require Special Management
Specialty Patients Require Special Management 3.6% Of 7% Non-Specialty drugs Health Plan Members Specialty drugs – medical Account For… 13% Specialty drugs – pharmacy 17% 25% of total 20% Specialty condition health care costs All Othe r 43% Other co-morbidities Source: Milliman Specialty Medication
Slide 7: CVS Caremark Now Has Assets To Manage All Aspects Of Specialty Patients Health Care Spend
CVS Caremark Now Has Assets To Manage All Aspects Of Specialty Patients Health Care Spend Non-Specialty drugs Our Assets 7% Specialty drugs – medical 13% ! Novologix – Automated claims Specialty drugs – pharmacy management technology 17% ! Integration of Accordant with Specialty Pharmacy – Manages t
Slide 8: Agenda
Agenda ! Strong growth in a growing market ! Differentiated offerings set us apart ! Expanding into the infusion market 8
Slide 9: Enterprise Assets Position CVS Caremark To Outperform The Market
Enterprise Assets Position CVS Caremark To Outperform The Market Cost Quality Access Traditional Pharmacy Medication Mail – lack of choice Approach only focused Retail – clinical challenges 1. Comprehensive 2. CVS Clinical 3. Integrated Trend Management Care Model Delivery Novologix Accordant Specia
Slide 10: Comprehensive Trend Management: We Add Unique Capabilities
1 Comprehensive Trend Management: We Add Unique Capabilities Basic Trend CVS Caremark Unique Management Trend Management • Exclusive specialty • Site of service management Price network • Coram infusion, preferred networks • Novologix technology • Prior authorization / platform clinical guidelines –
Slide 11: CVS Caremark Technology Platform Example
1 CVS Caremark Technology Platform Example Our sophisticated Analysis Of Claims For Infused Remicade, IBD system identifies $35K edit / re-pricing opportunities on $30K claims payments $25K $20K $15K $10K $5K $0K 0 20 40 60 80 100 120 140 160 Place of Injection: Hospital / Outpatient Office Home Pri
Slide 12: CVS Caremark Technology Platform Example
1 CVS Caremark Technology Platform Example Our sophisticated Analysis Of Claims For Infused Remicade, IBD system identifies $35K edit / re-pricing opportunities on $30K claims payments $25K $20K $15K $10K $5K APPROPRIATE RANGE $0K 0 20 40 60 80 100 120 140 160 Place of Injection: Hospital / Outpatie
Slide 13: CVS Caremark Technology Platform Example
1 CVS Caremark Technology Platform Example Dosages over Our sophisticated Analysis Of Claims For Infused Remicade, IBD 2x recommended system identifies $35K guidelines edit / re-pricing opportunities on $30K claims payments $25K $20K $15K $10K $5K APPROPRIATE RANGE $0K 0 20 40 60 80 100 120 140 160
Slide 14: CVS Caremark Technology Platform Example
1 CVS Caremark Technology Platform Example Our sophisticated Analysis Of Claims For Infused Remicade, IBD system identifies $35K edit / re-pricing opportunities on Up to 10x $30K increase in claims payments paid amounts $25K $20K $15K $10K $5K APPROPRIATE RANGE $0K 0 20 40 60 80 100 120 140 160 Plac
Slide 15: CVS Caremark Technology Platform Example
1 CVS Caremark Technology Platform Example Our sophisticated Analysis Of Claims For Infused Remicade, IBD system identifies $35K edit / re-pricing opportunities on $30K Hospital-based claims payments infusions … highest costs $25K $20K $15K $10K $5K APPROPRIATE RANGE $0K 0 20 40 60 80 100 120 140 16
Slide 16: Managing Medical Pharmacy Spend: Case Study
1 Managing Medical Pharmacy Spend: Case Study ! Current Situation – Large health plan – Nurse manually reviewing medical Savings drug claims – Limited visibility of excessive overbilling of drug quantities ! Solution – Automated drug code-based pricing; quantity and fee schedule edits – Uncovered an
Slide 17: CVS Caremark Clinical Model Extends Care Management Impact
2 CVS Caremark Clinical Model Extends Care Management Impact Symptoms Self-care • Flare-ups • Self-injection training • Pain • Physical activity • Fatigue • Nutrition • Disease progression • Fall prevention Specialty Pharmacy: Medication Management Co-morbidities • Adherence • Depression • Side effe
Slide 18: The Only Specialty Pharmacy That Integrates Rare Disease Care Management
2 The Only Specialty Pharmacy That Integrates Rare Disease Care Management % Reduction In Hospitalization And ER Visits Disease-related All Cause All Cause Admission Rate Admission Rate ER Visits Readmission Rate 4% Reduction 7% Reduction 16% Reduction 23% Reduction CVS Caremark clinical model can s
Slide 19: Specialty Connect: Improves Access, Choice And Outcomes
3 Specialty Connect: Improves Access, Choice And Outcomes Patient drops off / doctor sends prescription to Delivery to home CVS/pharmacy OR OR Patient receives clinical, financial and logistic support from our therapy-specific Doctor sends Specialty CareTeams Delivery to prescription to specialty CV
Slide 20: Specialty Connect In Action: Improving Percentage Of Adherent Patients
3 Specialty Connect In Action: Improving Percentage Of Adherent Patients Percentage Of Optimally Adherent Patients 70% 86% CVS Caremark Specialty Adherence 70% Control Pilot 50% of patients preferred option to pick up at retail Source: CVS Caremark internal analysis, 2013. 20
Slide 21: Agenda
Agenda ! Strong growth in a growing market ! Differentiated offerings set us apart ! Expanding into the infusion market 21
Slide 22: Coram Overview
Coram Overview ! $1.3 billion in revenue – 45% Specialty – 36% Acute infusion – 19% Enteral ! ~4,600 employees – 600 nurses – 340 pharmacists ! 85 branch locations Coram Clinical Trials – Includes 65+ ambulatory Coram Branch infusion suites Coram Enteral Nutrition Center Coram Branch w/ Infusion Sui
Slide 23: Infused Agents Are An Attractive Market For CVS Caremark
Infused Agents Are An Attractive Market For CVS Caremark Trend Of Infusion Spend Mix ($ billions) 11% 27 CAGR 23 17 19 Growing 18 16 3X Specialty 9 faster Infusion (non-oncology) 9 7 Non-Specialty Infusion 2012 2013 2014 2016 2018 CVS Caremark: $1.5B CVS Caremark + Coram: $3B Notes: 1. CVS Caremark
Slide 24: CVS Caremark Is Best Positioned To Provide Clients With Infusion Services
CVS Caremark Is Best Positioned To Provide Clients With Infusion Services The Need CVS Caremark Solution ! Cost control Proven solutions to manage costs: ! Robust infusion pipeline ! Narrow networks: ! Improve clinical outcomes limited infusion providers ! Reduce administrative ! Formulary: extend b
Slide 25: CVS Caremark + Coram = Market Leader
CVS Caremark + Coram = Market Leader ! Combined business: #1 share of infusion market ! Complementary product lines and core competencies – Novologix technology enables infusion management – Cross-sell opportunities in existing products ! Unmatched clinical expertise across all infused categories !
Slide 26: CVS Caremark: A Differentiated Position In The Industry
CVS Caremark: A Differentiated Position In The Industry PBM Retail / Specialty Competitor Competitor Trend Management Clinical Care Management Choice of Access Infusion Most Complete Offering Least Complete Offering 26
Slide 27: Capitalizing On The Specialty Opportunity With Ability & Agility
Capitalizing On The Specialty Opportunity With Ability & Agility ! Strategic investments create differentiated offerings for patients and payors ! Only company with integrated capabilities ! Leader with deep clinical expertise and strong record of growth in a favorable market ! Expansion of infusion