CVS Tricare/BCBS loss

[CardinalGirl210]

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What do you think CVS's next move will be? How does this change things for people at the store level? 40 million RXs is a lot to lose. I am in Target/CVS and we have lost 20% of our business just from becoming CVS and losing the bottles, now I wonder how bad it will be when we lose the insurance plans. Not sure how CVS could let that happen....

 

[WVUPharm2007]

20% of your base left because of the stupid bottles? lol...

 

[PharFromNormal]

What do you think CVS's next move will be? How does this change things for people at the store level? 40 million RXs is a lot to lose. I am in Target/CVS and we have lost 20% of our business just from becoming CVS and losing the bottles, now I wonder how bad it will be when we lose the insurance plans. Not sure how CVS could let that happen....

Probably cut tech/rph hours related to the loss in scripts. Imagine the other situation though... getting less and less reimbursement while gaining more and more volume. Labor model at wags is going to continue to get stretched. Do more and more and more with the same amount of labor or less. Nothing new here folks, move along.

Also easy to lose 20% of volume when your base is a fraction of the size as the big chains. Wags and cvs will fill something like a billion scripts each next year. While 40 million is a significant loss it's no where near the 20% mark off the base.

 

[ChalupaBatman86]

Larry said on the earnings call their most profitable Rx is always the last one they fill. This is because their is no increase in labor to fill that one (or 20 or 100) extra prescriptions. 20% loss will hurt a LOT. He is going to leverage their investment in technology to reduce labor costs. Whatever that means.


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[doublehh03]

20% of your base left because of the stupid bottles? lol...

They're going to other CVS. I can't tell you how many Target transfers I have done b/c the customers don't like how the Target/CVS is trained.

But obviously Target/CVS will see cuts soon b/c they have way more hours per script done than compared to a regular CVS.

 

[CardinalGirl210]

20% of your base left because of the stupid bottles? lol...

I mean when you take away the bottles and the Target brand and replace it with CVS when there is a CVS on every corner what is the point of going to Target unless you just love the staff? Have you not read articles about people petitioning for the bottles and the complaints to CVS? Silly but people liked them enough to stop coming into the stores because of it

 

[CardinalGirl210]

They're going to other CVS. I can't tell you how many Target transfers I have done b/c the customers don't like how the Target/CVS is trained.

But obviously Target/CVS will see cuts soon b/c they have way more hours per script done than compared to a regular CVS.

We had people transfer because of convenience; we give a 15-20 minute wait on all RXs as opposed to 2 hours at the core stores. I don't think training is the issue. It's because there is no incentive to fill at CVS Target unless you love to shop at Target. The extra care card only works at CVS; so they accumulate points just to only go to CVS anyway - makes no sense

 

[doublehh03]

We had people transfer because of convenience; we give a 15-20 minute wait on all RXs as opposed to 2 hours at the core stores. I don't think training is the issue. It's because there is no incentive to fill at CVS Target unless you love to shop at Target. The extra care card only works at CVS; so they accumulate points just to only go to CVS anyway - makes no sense

I can't say for all Target/CVS but that's what my store is experiencing. We're doing profile transfers not just a med at a time.

 

[mentos]

Do you still get 5% off with Redcard at Target CVS? On Sudafed and stuff behind the counter.

 

[CardinalGirl210]

Do you still get 5% off with Redcard at Target CVS? On Sudafed and stuff behind the counter.

No because they are CVS products. Everything inside the pharmacy box is CVS; everything outside is target. So OTCs on the target shelf would get 5% off. That is also confusing for customers. They think that everything pharmacy related belongs to CVS and will look for things advertised by CVS inside of the target.

 

[BMBiology]

We had people transfer because of convenience; we give a 15-20 minute wait on all RXs as opposed to 2 hours at the core stores. I don't think training is the issue. It's because there is no incentive to fill at CVS Target unless you love to shop at Target. The extra care card only works at CVS; so they accumulate points just to only go to CVS anyway - makes no sense

Are the RXs being transferred to other retails besides CVS? Sounds like CVS got a better deal at the expense of Target and its pharmacy employees.


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[PharFromNormal]

Larry said on the earnings call their most profitable Rx is always the last one they fill. This is because their is no increase in labor to fill that one (or 20 or 100) extra prescriptions. 20% loss will hurt a LOT. He is going to leverage their investment in technology to reduce labor costs. Whatever that means.


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Again, 40 million scripts is not 20% of CVS's total volume. 20% is more like 200 million scripts. Yes the loss will hurt CVS and will likely reduce labor in the stores that this impacts but it's not 20% of their volume. Read their reports. They fill way more than 200 million scripts a year.

 

[CardinalGirl210]

Are the RXs being transferred to other retails besides CVS? Sounds like CVS got a better deal at the expense of Target and its pharmacy employees.


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In the beginning when we got the CVS signs we were transferring out to Walmart, grocery chains, etc because of the people that hated CVS and transferred to Target. Then we slowly stopped seeing regulars because they were silently transferring to CVS core stores

 

[ChalupaBatman86]

The CEO said it's a big deal. He was very negative about the impact.


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[CardinalGirl210]

Thinking about leaving CVS/ Target. The hours and pay are good at Target but CVS expects a lot and we are only seeing half of what the core stores see. I just don't think the Target buyout was a good idea. I don't see it lasting 5 years. My store used to do 1000 a week and now we are down to 700 a week on a good week BEFORE the insurance changes. I don't think they will close the target locations; but they will strip us of benefits, cut hours, and whatever else they can do to remain profitable

 

[sosoo]

My store used to do 1000 a week and now we are down to 700 a week on a good week BEFORE the insurance changes.

700 a week is an average cvs volume. plenty of cvs in downtown DC does a lot less.

 

[lord999]

2016: Walgreens "wins", CVS loses
http://www.military.com/daily-news/...rmacy-network-adds-walgreens-removes-cvs.html

2012: CVS "wins", Walgreens Loses
http://www.sfgate.com/health/article/Walgreens-spat-sends-millions-to-new-pharmacies-2479087.php

Being in the negotiation process, NAC always drives a hard bargain (for those are fed current, the official representative is the NAC, which means VA and TMA San Antonio do the negotiation). Same thing hit Walgreens four/five years ago, and kind of destroyed a bunch of Deerfield careers. Medco and CVS (not Caremark) winning the contract forced Caremark to give generous terms for Medco's acquisition and was a decisive factor in CVS and Caremark merging, but they undercut Walgreens to ensure the terms. That TMA contract is powerful enough on its own, but it has a follow-on effect where most other insurance companies dealing with a TMA/FEHB service contract basically say "whatever TMA/FEHB gets + a %" kind of like how even though Joint Commission isn't a governmental agency, most governmental agencies will accept a JC accreditation without asking further questions. By losing the contract this time, CVS/Caremark is going to have to messy task of having to renegotiate every contract with that clause as they don't have that decisive advantage anymore. It also undermines CVS's relationship with the distributors.

Makes being a Woonsocket guy a stressful job next year. My own bet is that CVS will capitulate to our terms a year in like Walgreens did. But neither of them agreed to Walmart's terms (which are legendarily rock bottom, those hillbillies really, really want the contract). But knowing that this time, Walgreens was in a must-win position, NAC really went after a bargain-basement contract and won a really favorable contract.

Think of this way, your pharmacist tears translate into more money for the F-35!

 

[maria1oh]

This will have a big impact on the tricare hot spots in maryland, Virginia and DC but other parts of the country it will not make a big difference overall.

 

[lane one]

Larry said on the earnings call their most profitable Rx is always the last one they fill. This is because their is no increase in labor to fill that one (or 20 or 100) extra prescriptions. 20% loss will hurt a LOT. He is going to leverage their investment in technology to reduce labor costs. Whatever that means.


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Think Westworld, but with a CVS logo...

 

[lane one]

What do you think CVS's next move will be? How does this change things for people at the store level? 40 million RXs is a lot to lose. I am in Target/CVS and we have lost 20% of our business just from becoming CVS and losing the bottles, now I wonder how bad it will be when we lose the insurance plans. Not sure how CVS could let that happen....

As others have suggested, 40 million isn't a lot to lose in the big picture. It's a lot, but not enough to break the company. CVS placed too much focus on their PBM business and let walgreens steal business in the front store. They let their stores rot and they're paying the price. I don't think the Target acquisition had anything to do with that 40 million RX loss. If anything, it helped dampen the blow.

I mean when you take away the bottles and the Target brand and replace it with CVS when there is a CVS on every corner what is the point of going to Target unless you just love the staff? Have you not read articles about people petitioning for the bottles and the complaints to CVS? Silly but people liked them enough to stop coming into the stores because of it

I have no doubt people loved the bottles, although I'm not sure what you mean by target "brand"...the pills in the bottle are the same. I also have no doubt that your service was superior, but unfortunately it's about money. Target pharmacies weren't making enough money for Target to keep them, so they sold them. If people would pay more money for red bottles, faster service and extra tech help then the business model would work, but they don't. Third party payers pay the same amount regardless of it taking 10 minutes or 2 hours.

We had people transfer because of convenience; we give a 15-20 minute wait on all RXs as opposed to 2 hours at the core stores. I don't think training is the issue. It's because there is no incentive to fill at CVS Target unless you love to shop at Target. The extra care card only works at CVS; so they accumulate points just to only go to CVS anyway - makes no sense

It makes perfect sense that you would lose RXs to core stores. Once your service times are equalized (made so through staffing cuts), patient's will choose the most convenient CVS to fill at. People are lazy and they love their drive-thrus.

It sucks, but I wouldn't leave the company if I were you. Your pharmacy won't be what it used to be (as they cut staff even more), but CVS in Target will still be one of the best PIC gigs around. No drive-thru, good pay, great techs, starbucks, no store manager harassing you and the perks go on and on.

 

[mentos]

No because they are CVS products. Everything inside the pharmacy box is CVS; everything outside is target. So OTCs on the target shelf would get 5% off. That is also confusing for customers. They think that everything pharmacy related belongs to CVS and will look for things advertised by CVS inside of the target.

Well that's dumb. I work at CVS but I used drive out of the way to buy Sudafed at Target because it was much cheaper (3-4 bucks for #48) plus the 5% off with Redcard. Now I can't even use my CVS discount at Target so I have no reason to go there. My wife used to fill at Target because she liked the pharmacy rewards coupons, those are gone too. So she transferred out to CVS down the street.

 

[M0df]

700 a week is an average cvs volume. plenty of cvs in downtown DC does a lot less.

That is incorrect. Average CVS does 1500-1800 a week. DC stores are not representative of your typical CVS across the country.

 

[sosoo]

i must have missed some news. did CVS lose BCBS ? i thought it was just Tricare.

 

[ldiot]

CVS will focus on growing other revenue streams. Most of the company's growth has been outside of retail even before this. The focus for retail is reduction of costs which means higher efficiency/less hours. What this means beyond cutting tech hours I'm not sure, it's possible that cuts are made in middle management by restructuring.

 

[ldiot]

Again, 40 million scripts is not 20% of CVS's total volume. 20% is more like 200 million scripts. Yes the loss will hurt CVS and will likely reduce labor in the stores that this impacts but it's not 20% of their volume. Read their reports. They fill way more than 200 million scripts a year.

Yeah as of 2011 CVS filled well over a billion, over half of which were on the retail side. I'm sure it's even higher now.

 

[ldiot]

Thinking about leaving CVS/ Target. The hours and pay are good at Target but CVS expects a lot and we are only seeing half of what the core stores see. I just don't think the Target buyout was a good idea. I don't see it lasting 5 years. My store used to do 1000 a week and now we are down to 700 a week on a good week BEFORE the insurance changes. I don't think they will close the target locations; but they will strip us of benefits, cut hours, and whatever else they can do to remain profitable

I'm sure the deal with Target is set up in a way that they cannot just close the stores and transfer the records to another CVS, so initially I figured that they may actually do the opposite and close stand alone stores and move the volume to their target location... but since a lot of people are apparently transferring from Target stores to CVS this seems counterproductive. Are the operating expenses in a Target lower since they potentially aren't paying electric/landscaping/snow removal/insurance/etc? I have no idea, it just depends on the details of the acquisition and what the break even point is in terms of volume but this could be significant.

Another thing to consider is that if CVS has a standalone store and a Target store that are both losing money they are probably saving themselves a lot more by closing the stand alone store since they are also paying front store staff and have money tied up in merchandise at that location, where at Target they are just a pharmacy and aren't paying a store manager/etc.

 

[PharFromNormal]

I'm sure the deal with Target is set up in a way that they cannot just close the stores and transfer the records to another CVS, so initially I figured that they may actually do the opposite and close stand alone stores and move the volume to their target location... but since a lot of people are apparently transferring from Target stores to CVS this seems counterproductive. Are the operating expenses in a Target lower since they potentially aren't paying electric/landscaping/snow removal/insurance/etc? I have no idea, it just depends on the details of the acquisition and what the break even point is in terms of volume but this could be significant.

Another thing to consider is that if CVS has a standalone store and a Target store that are both losing money they are probably saving themselves a lot more by closing the stand alone store since they are also paying front store staff and have money tied up in merchandise at that location, where at Target they are just a pharmacy and aren't paying a store manager/etc.

I think you bring up a lot of good points on cvs not having the other overhead or loss leaders to help support their business. I think the hard part of this model is, if I'm a lazy pharmacy patient that has amassed multiple chronic conditions and filling a boatload of meds, I'm going to the drive thru 24 hour pharmacy that has a clear parking lot and little traffic that's close by and not the busy target where I have to weave cars to park dodge cars parking walking in and fight through a bunch of Christmas shoppers on the way to pick up my oxys. If I wanted to do this I would go to Walmart. Target is way too fancy for this version of me.

 

[ldiot]

I think you bring up a lot of good points on cvs not having the other overhead or loss leaders to help support their business. I think the hard part of this model is, if I'm a lazy pharmacy patient that has amassed multiple chronic conditions and filling a boatload of meds, I'm going to the drive thru 24 hour pharmacy that has a clear parking lot and little traffic that's close by and not the busy target where I have to weave cars to park dodge cars parking walking in and fight through a bunch of Christmas shoppers on the way to pick up my oxys. If I wanted to do this I would go to Walmart. Target is way too fancy for this version of me.

Yeah I really don't think anyone would fill at Target or any grocery store unless they do their main grocery shopping there anyways. With that being said, most people buy groceries and most grocery stores have a pharmacy so why does CVS and WAGS dominate retail? I'm guessing it's because something like half of the population lives within 5 minutes of a CVS so it's really no less convenient to go there (maybe more convenient for people who are picking up scripts multiple times a month and don't need groceries). Plus you have insurance preference.

 

[sosoo]

why does this topic's title include BCBS ? i have not heard of BCBS dumping cvs.

 

[Sunshinerph]

why does this topic's title include BCBS ? i have not heard of BCBS dumping cvs.

BCBS members will be required to fill prescriptions at Walgreens for the cheapest Co-pay. BCBS customers will have to pay higher copay to fill at CVS starting 2017.

 

[PharFromNormal]

BCBS members will be required to fill prescriptions at Walgreens for the cheapest Co-pay. BCBS customers will have to pay higher copay to fill at CVS starting 2017.

Just to be perfectly clear it's those blues plans managed by Prime Therapuetics and even from there it's not necessarily all lines of business. "BCBS" can be interpreted as very very very broad.

 

[Old Timer]

BCBS members will be required to fill prescriptions at Walgreens for the cheapest Co-pay. BCBS customers will have to pay higher copay to fill at CVS starting 2017.

Really. If you don't know this is 1000000000000000000000000% false, I can't help you. BCBS is an association of health plans. There is no one single universal BB/BS plan anywhere in the United States. They do not all use the same carrier to process their claims. BC/BS of Philadelphia (Independence Blue Cross) uses Future Scripts. Federal BC/BS user Caremark. I am sure there are BC/BS that use Prime Therapeutics and will therefore no longer use CVS in their network.

The Blue Cross Blue Shield System is made up of 36 independent and locally operated companies. To access your member services, please visit your BCBS company.

BC/BS Shield Web Site

So, after January 1, there will still be zillions of prescriptions filled at CVS under the BC/BS umbrella....