CVS Caremark Corporation (CVS) is all set to tackle this year’s flu season with its recently launched You vs. Flu campaign, under which seasonal flu vaccinations will be sold through all CVS/pharmacy and MinuteClinic to help consumers fight against the flu.
Presently, CVS/pharmacy covers over 7,200 locations and MinuteClinic has nearly 600 locations. The company is also making flu shots available through direct medical billing for many national and regional health plans such as Medicare Part B and Tricare that will cover the cost of a flu shot.
As per The Centers for Disease Control and Prevention (CDC) flu shot should be taken by all as soon as the vaccine is available in the market, including those who were vaccinated during the last flu season. CVS will charge $29.99 per flu shot and it will also provide a $5 gift card in case any part of the cost remains uncovered by health insurance.
Flu activity is steadily increasing in the US following the widespread outbreak of influenza cases. Each year, 3,600 to 49,000 deaths occur due to influenza in the US. Annually over 200,000 Americans are admitted to the hospitals with flu-related complications. However, the latest seasonal flu vaccine is designed to fight against three influenza viruses, including an influenza B virus and two influenza A viruses, H1N1 and H3N2. According to CVS, flu shots reduce the chance of flu attack by nearly 70%.
The Retail Pharmacy segment (generates 49% of CVS’ total revenue) sells prescription drugs and general merchandise (front store products), which includes over-the-counter (OTC) drugs, greeting cards, film and photo finishing services, beauty and cosmetic products, and convenience food through the company’s stores, as well as at CVS.com (the company’s online store). The role of retail pharmacy also includes flu vaccinations as well as face-to-face patient counseling with respect to adherence to drug therapies, closing gaps in care, and cost-effective drug therapies.
During the second quarter of 2011, revenues from Retail Pharmacy increased 3.6% to $14.8 billion. Through the MinuteClinics the company expects to provide coverage to those 32 million people that will be covered under the insurance bracket beginning in 2014.
We are confident about CVS’ longer-term potential based on its retail execution, deployment potential and strong 2012 generics cycle. Moreover, during the flu season, CVS expects to boost its retail performance further. Moreover, we believe the healthcare reform will open up a big opportunity for the company.
Presently we remain ‘Neutral’ on CVS.
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