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CVS Health Q1 net revenues increased 18.9%

Staff writer |
CVS Health Corporation announced operating results for the first quarter ended March 31, 2016. Net revenues increased 18.9%, or $6.9 billion, to $43.2 billion.

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This compares to the three months ended March 31, 2015. Revenues in the Pharmacy Services Segment increased 20.5%, or $4.9 billion, to $28.8 billion in the three months ended March 31, 2016.

The increase was primarily driven by pharmacy network claim volume and growth in specialty pharmacy. Pharmacy network claims processed during the three months ended March 31, 2016 increased 22.6% to 283 million, compared to 231 million in the prior year.

The increase in pharmacy network claim volume was primarily due to the growth in net new business. Mail choice claims processed during the three months ended March 31, 2016, increased 6.6%, to 21.7 million, compared to 20.3 million in the prior year.

The increase in mail choice claims was primarily driven by the continued adoption of our Maintenance Choice offerings.

Revenues in the Retail/LTC Segment increased 18.6%, or $3.2 billion, to $20.1 billion, in the three months ended March 31, 2016. The increase was primarily driven by the addition of the long-term care (LTC) operations acquired as part of the acquisition of Omnicare in August 2015, the addition of the pharmacies and clinics of Target Corporation acquired in December 2015 and pharmacy same store sales growth.

Same store sales increased 4.2% versus the first quarter of last year. Same store sales were positively affected by approximately 125 basis points due to an additional day in 2016 related to leap year.

Pharmacy same store sales rose 5.5% and pharmacy same store prescription volumes rose 5.9% on a 30-day equivalent basis. Pharmacy same store sales were negatively affected by approximately 360 basis points from recent generic drug introductions, and positively affected by approximately 130 basis points from the additional day in 2016 related to leap year.

Front store same store sales increased 0.7%. Front store same store sales were negatively affected by softer customer traffic, partially offset by an increase in basket size and the shift of Easter from April in 2015 to March in 2016, which positively affected front store same store sales by approximately 80 basis points.

Front store same store sales were also positively affected by approximately 105 basis points from the additional day in 2016 related to leap year.

For the three months ended March 31, 2016, the generic dispensing rate increased approximately 170 basis points to 85.2% in the Pharmacy Services Segment and increased approximately 125 basis points to 85.7% in the Retail/LTC Segment.


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