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CVS’s Health Services Revenue Grew to $186.8 Billion


CVS’s Health Services segment — which includes its PBM CVS Caremark — now accounts for more than half of CVS’s total revenue.

CVS Health’s total revenue in 2023 increased to $357.8 billion, up 10.9% compared with 2022. Almost half of that revenue now comes the Health Services division, called CVS Healthspire, which the company organized in December 2023.

Total revenue for the Health Service segment increased 10% in 2023 to $186.8 billion. In its filing with the Securities and Exchange Commission, CVS said this segment’s revenue is primarily generated from the sale and managing of prescription drugs to members.

The Health Services division includes several companies, including CVS Caremark and CVS Specialty. Also included in this division are Cordavis (its private label biosimilar company), Oak Street Health, Signify Health and MinuteClinic. Oak Street is clinic providing healthcare to Medicare beneficiaries that CVS acquired in May 2023, and Signify health provides value-based care services the CVS acquired in March 2023.

For the full year, the Health Services segment processed 2.3 billion prescriptions, of which almost 88% were generics. There was a slight increase in the number of generics dispensed, the company attributed to a decrease in COVID-19 vaccinations in 2023 compared with 2022. This was offset by an increase in GLP-1 pharmacy claims in 2023. GLP-1 therapies such semaglutide and tirzepatide are used to treat diabetes and obesity.

Karen S. Lynch

Karen S. Lynch

In an investor call, Karen S. Lynch, CVS Health president and CEO, said that in the fourth quarter of 2023, Caremark brought on 3 million new members. This was offset by the loss of a loss client. Effective Jan. 1, 2024, Tyson Foods replaced CVS Caremark with Rightway. CVS Caremark will, however, continue to provide specialty benefits.

Related: Tyson Foods Selects Rightway as its PBM over CVS Caremark

In its SEC filing, CVS noted that competitive pressures in the PBM industry have caused the it and other PBMs to continue to “share with clients a larger portion of rebates, fees and/or discounts received from pharmaceutical manufacturers. In addition, marketplace dynamics and regulatory changes have limited the company’s ability to offer plan sponsors pricing that includes retail network ‘differential’ or ‘spread,’ and the company expects these trends to continue.”

Last year, Blue Shield of California also made the decision to drop CVS Caremark as its PBM in January 2025. One of the biggest changes is the replacement of CVS Caremark with Prime Therapeutics as the company that will negotiate savings with drug manufacturers to move toward a value-based model that focuses on health outcomes. As with Rightway, CVS Caremark will continue to provide specialty pharmacy services for Blue Shield of California.

In 2025, CVS plans to launch two new programs focused on bringing more transparency to drug pricing. In December 2023, CVS announced its CVS CostVantage, a pharmacy reimbursement model that will define the drug cost and related reimbursement using a formula built on the cost of the drug, a set markup and a fee that reflects the care and value of pharmacy services.

“This addresses the persistent reimbursement pressures in the retail pharmacy industry,” Lynch said during the call. “The industry has continually stressed importance of driving transparency and affordability and simplicity. With this model — and our TrueCost program — we are leading to support those.”

CVS Caremark TrueCost is a model that offers client pricing reflecting the true net cost of prescription drugs, with visibility into administrative fees.

Another significant move is that effective April 1, 2024, CVS Caremark will remove Humira (adalimumab) from its national commercial template formularies. CVS Caremark’s move is related to the company’s launch of Cordavis in August 2023, which is working directly with pharmaceutical manufacturers to co-produce biosimilar products. CVS Caremark has announced that AbbVie, the manufacturer of Humira, has entered into an agreement to supply Cordavis with a committed volume of co-branded Humira.

Related: CVS Caremark Switches Up Biosimilar Coverage in 2024

A Formulary Watch review of CVS Health’s Performance Drug List-Standard Control for January 2024 found that CVS had removed Amgen’s Amjevita, the first-to-launch Humira biosimilar.

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