Cvs Health Corporation · NYSE:CVS
Cvs Health — Investor Presentation (December 2015)
39 slides from Cvs Health's investor presentation, Dec 16, 2015
Slide 1: Capitalizing on Growth Opportunities in Specialty
Capitalizing on Growth Opportunities in Specialty Alan Lotvin, M.D. Executive Vice President, CVS/specialty
Slide 2: Agenda
Agenda Performance Highlights CVS/specialty Differentiated Assets Future Growth Initiatives 2
Slide 3: CVS/specialty Has Grown Faster Than the Industry
CVS/specialty Has Grown Faster Than the Industry CVS Health Specialty Revenue ($, billions) 49 CVS/specialty Managed 40 30 22 19 2012 2013 2014 2015E 2016E . Source: CVS Health Internal Analysis, does not include specialty revenue from Target pharmacies. 3
Slide 4: CVS/specialty Has Grown Faster Than the Industry
CVS/specialty Has Grown Faster Than the Industry CVS/specialty Dispensed Revenue ($, billions) 35 32.3% CVS/specialty 27 CAGR 20 14 19.3% 11 Industry CAGR 2012 2013 2014 2015E 2016E . Source: CVS Health Internal Analysis, does not include specialty revenue from Target pharmacies. 4
Slide 5: CVS/specialty Is Growing Faster Than Nearest Competitor
CVS/specialty Is Growing Faster Than Nearest Competitor to Become the Largest Specialty Pharmacy Specialty Pharmacy Share 2013 2014 25% 26% 33% 35% 300 bps 700 bps point lead for point lead for CVS/specialty p y competitor 2% 19% 2% 28% 3% 10% 6% 11% $63B Market $78B Market Competitor A Competitor B
Slide 6: Agenda
Agenda Performance Highlights CVS/specialty Differentiated Assets Future Growth Initiatives 6
Slide 7: The Traditional Specialty Pharmacy Model Now Represents Table Stakes
The Traditional Specialty Pharmacy Model Now Represents ‘Table Table Stakes Stakes’ in the Industry CLINICAL CLINICAL LOGISTICS MANAGEMENT MONITORING Side Effects Risk Evaluation and Cold Chain Mitigation Strategies Shipping Injection Training (REMS) Benefit and Financial Adherence Adverse Event Sup
Slide 8: CVS Health's Enterprise Assets Raise the Bar in Specialty Pharmacy
CVS Health’s Enterprise Assets ‘Raise the Bar’ in Specialty Pharmacy Coram, Infusion Services Novologix, Medical Specialty Cost M Management t M Management t Narrowest Exclusion Formulary ONLY Accordant, Care Management Quality Q y Specialty Connect Best-in-class Mobile App pp Access Access to 99% o
Slide 9: CVS/specialty Model Starts with National Footprint
CVS/specialty Model Starts with National Footprint CVS/specialty: CVS/specialt CVS/ CVS/pharmacy: T Target: Total th12 t hmoreh than more t l CVS/pharmacy: CVS/ th 7,900 than 1 660 1,660 more 7than th9009,500 9 500 9 Access
Slide 10: CVS/specialty Model Starts with National Footprint
CVS/specialty Model Starts with National Footprint CVS/specialty: CVS/specialt T Target: Total th12 1,660 t moreh than t l CVS/pharmacy: CVS/ 1 660 more than th 9,500 9 500 10 Access
Slide 11: CVS/specialty Model Starts with National Footprint
CVS/specialty Model Starts with National Footprint CVS/specialty: CVS/specialt Total CVS/ h 12 T t l CVS/pharmacy: more than th 9,500 9 500 76% of the U.S. population lives within 5 miles of a CVS/pharmacy 11 Access
Slide 12: CVS/specialty Model Starts with National Footprint
CVS/specialty Model Starts with National Footprint CVS/specialt 12 CVS/specialty: Footprint enables streamlined operations, reduced shipping costs and improved efficiency 12 Access
Slide 13: Specialty Connect Model Improves the Patient Experience with Convenience
Our Specialty Connect Model Improves the Patient Experience with Convenience HIGHLY-UTILIZED HIGHLY UTILIZED DELIVERY DELIVERYOF CLINICAL CHANNEL CHOICE SUPPORT ~500 specialty patients a day 100,000+ Total Patients Note: 1. In-store pick up currently is not available in Arkansas, Oklahoma and West V
Slide 14: Specialty Connect Model Improves Patient Experience with Flexibility
Our Specialty Connect Model Improves Patient Experience p with Flexibility y HIGHLY-UTILIZED HIGHLY UTILIZED DELIVERY DELIVERYOF CLINICAL CHANNEL CHOICE SUPPORT 54% prefer to pick up at CVS/pharmacy Note: 1. In-store pick up currently is not available in Arkansas, Oklahoma and West Virginia. Some st
Slide 15: Specialty Connect Model Improves Patient Experience with Better Outcomes
Our Specialty Connect Model Improves Patient Experience with Better Outcomes HIGHLY-UTILIZED HIGHLY UTILIZED DELIVERY DELIVERYOF CLINICAL CHANNEL CHOICE C OC SUPPORT S O 11.4% adherence improvement Note: 1. In-store pick up currently is not available in Arkansas, Oklahoma and West Virginia. Some sta
Slide 16: Our Best-in-class Mobile App Further Improves Experience
Our Best-in-class Mobile App Further Improves Experience for Specialty Patients SIMPLE COMMUNICATIONS Choice of Delivery Text Messaging EASY TO LOGIN ONE-STEP REFILL 16 Access
Slide 17: Our Best-in-class Mobile App Further Improves Experience
Our Best-in-class Mobile App Further Improves Experience for Specialty Patients SIMPLE COMMUNICATIONS Choice of Delivery Text Messaging EASY TO LOGIN ONE-STEP REFILL 17 Access
Slide 18: Our Best-in-class Mobile App Further Improves Experience
Our Best-in-class Mobile App Further Improves Experience for Specialty Patients SIMPLE COMMUNICATIONS Choice of Delivery Text Messaging EASY TO LOGIN Fingerprint Touch ID Facial Recognition ONE-STEP REFILL 18 Access
Slide 19: Our Best-in-class Mobile App Further Improves Experience
Our Best-in-class Mobile App Further Improves Experience for Specialty Patients SIMPLE COMMUNICATIONS Choice of Delivery Text Messaging EASY TO LOGIN Fingerprint Touch ID Facial Recognition ONE-STEP REFILL 19 Access
Slide 20: Our Best-in-class Mobile App Further Improves Experience
Our Best-in-class Mobile App Further Improves Experience for Specialty Patients SIMPLE COMMUNICATIONS Choice of Delivery Text Messaging EASY TO LOGIN Fingerprint Touch ID Facial Recognition ONE-STEP REFILL Scan to Refill Refill Reminder 20 Access
Slide 21: Our Best-in-class Mobile App Further Improves Experience
Our Best-in-class Mobile App Further Improves Experience for Specialty Patients SIMPLE COMMUNICATIONS Choice of Delivery Text Messaging EASY TO LOGIN Fingerprint Touch ID Facial Recognition ONE-STEP REFILL Scan to Refill Refill Reminder 21 Access
Slide 22: Enterprise Assets Make CVS/specialty the Pharmacy of Choice
Enterprise Assets Make CVS/specialty the Pharmacy of Choice When Patients Have Options SPECIALTY PHARMACY SHARE OF PATIENT-DIRECTED BUSINESS ORAL ONCOLOGY HEPATITIS C Indexed National Market Share Other specialty pharmacies CVS/specialty Nearest competitor (26 pharmacies in distribution network) Sou
Slide 23: Our Assets Also Make CVS/specialty a Pharmacy of Choice in Limited Networks
Our Assets Also Make CVS/specialty a Pharmacy of Choice in Limited Manufacturer Networks Blincyto y Uptravi p Infused anti-cancer Oral pulmonary arterial therapy hypertension (PAH) therapy Distribution Network: 1 of 2 Distribution Network: 1 of 2 and National Infusion and PBM Affiliated P Provider i
Slide 24: Effective Quality and Cost Management Solutions Are Resonating with Payors
Effective Quality and Cost Management Solutions Are e Resonating eso at g witht Payors ayo s Nearly 1,000 clients in the past 2 years have selected CVS/specialty as their Exclusive Specialty P Provider id 24 Quality and cost management
Slide 25: Effective Quality and Cost Management Solutions Are Resonating with Payors
Effective Quality and Cost Management Solutions Are e Resonating eso at g witht Payors ayo s Lives, millions Enrolled lives in 2014 182 Enrolled lives in 2016 Eligible lives 42 41 37 22 11 8 1.3 0.2 Accordant Specialty Formulary Specialty Medical Management 25 Quality and cost management
Slide 26: Adoption of Our Cost Management Solutions Results in Significantly Lower Trend
Adoption of Our Cost Management Solutions Results in Significantly Lower Trend Illustrative Ill t ti I t Integrated t d Trend PA Site 20% 6% of Claims Care Editing & 3% Pricing Specialty Formulary Generic 2% Pricing 2% Programs Models Exclusive Remaining 1% Network 1% Trend 1% 4% Source: CVS/caremar
Slide 27: Adoption of Our Cost Management Solutions Results in Significantly Lower Trend
Adoption of Our Cost Management Solutions Results in Significantly Lower Trend Illustrative Prior Trend Authorization Employer Client Example 34% 14% Specialty Site Formulary of Care 4% Generic Programs Claims Exclusive Editing 3% N t k Remaining Network Trend & Pricing 1% 12% Pricing Models Compreh
Slide 28: Agenda
Agenda Performance Highlights CVS/specialty Differentiated Assets Future Growth Initiatives 28
Slide 29: Our Strategic Business Imperatives
Our Strategic Business Imperatives Aggregate Grow Execute with Drive Enterprise Lives Share Excellence Innovation Focus FORMULARY PIPELINE ONCOLOGY CAPABILITIES Grow the core, Broaden the base 29
Slide 30: Aggregating Lives Requires Innovative Cost Management Programs: Value-based Contracting
Aggregating Lives Requires Innovative Cost Management Programs: Value Value-based based Contracting CONTRACTING INDICATION-SPECIFIC AUTOIMMUNE STRATEGIES APPROACH O C THERAPIES S Value Simple Rheumatoid Based No complex Arthritis: analyses needed 9 Effective Price Increases competition Crohn’s: Prot
Slide 31: Growing Share in Growing Segments
Growing Share in Growing Segments: Outperform Upon Launch with Proactive Strategies Indexed Growth: Key Tactics CVS/specialty Share 1.7 1.7 • Establish Centers of Excellence • Incorporate into Specialty Connect 1.5 1.5 • Engage physicians with differentiated service model • Pre-launch pharmacy train
Slide 32: Strong Pipeline Creates Growth Opportunity for CVS/specialty
Strong Pipeline Creates Growth Opportunity for CVS/specialty in Newly Launched Products ROBUST PIPELINE: ANTICIPATED SPECIALTY AGENTS IN 2016-2018 New Drugs 238 ANTICIPATED BLOCKBUSTER DRUGS: NSC Lung Cancer Breast Cancer Liver Disease (NASH) Alzheimer’s Disease rociletinib ribociclib obeticholic ac
Slide 33: Oncology Remains Key Pain Point for Payors
Oncology Remains Key Pain Point for Payors: CVS/specialty Developing Innovative Approach AVERAGE EPISODE SPEND BY PROVIDER: BREAST CANCER FIVE MODIFIABLE COST FACTORS Outliers 7-8X median Regimen Selection Duration of Therapy Use of Generics 75th percentile: $60K $30K Median: $42K Site of Care 25th
Slide 34: Oncology Remains Key Pain Point for Payors: Innovative Approach
Oncology Remains Key Pain Point for Payors: CVS/specialty Developing Innovative Approach AVERAGE EPISODE SPEND CVS/SPECIALTY VALUE-BASED BY PROVIDER: BREAST CANCER APPROACH Focus on drug and related costs Collaborate with oncologists, aligning to the highest value treatment Reduced R d d Reduc
Slide 35: Adding New Capabilities to the Enterprise Augments Organic Growth Strategies
Adding New Capabilities to the Enterprise Augments Organic Growth Strategies Infusion Share Industry Dynamics • More people ‘aging in place’ 5% 5% 6% • Home as lowest-cost site of care 10% • Administrative burden for plans 74% • Enhanced quality standard, 503B, most stringent in the industry CVS/spe
Slide 36: MyHealthTeams
New Relationship with Leading Social Network for Patients with Chronic Disease MyHealthTeams 36 Enterprise Focus
Slide 37: New Relationship with Leading Social Network for Patients with Chronic Disease
New Relationship with Leading Social Network for Patients with Chronic Disease 300K 48% Registered Users Active Users Creating Increasing Awareness and Engagement Script Growth 37 Enterprise Focus
Slide 38: The Right Strategy for an Evolving Health Care Market
The Right Strategy for an Evolving Health Care Market Demonstrating Value Improving specialty patient and provider experience to People, Payors and Providers Advanced trend management solutions for clients Leading expertise and position in all specialty Growing g the Core,, segments Broadening the B
Slide 39: Endnote
Endnote 1. , CVS/specialty, Coram, Novologix, Accordant, CVS/pharmacy, and Specialty Connect are trademarks or registered trademarks of CVS Pharmacy, Inc. 39