Larry Merlo, CEO of CVS Health is retiring

[STAR3URY]

Karen Lynch stepping in...

thoughts?



CVS Health Tops Q3 Earnings Forecast, Lifts 2020 Outlook: CEO Larry Merlo To Retire

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[VA77]

Meet the new boss....same as the old boss

 

[Chrish]

“In 2015, it was revealed that Merlo had the highest CEO-to-average-employee pay ratio of any American company by Fortune Magazine. CVS has also been criticized under Merlo's tenure as CEO for understaffing, not allowing pharmacy staff to take breaks, and underfunding critical aspects of daily operations.

Additionally, claims of CVS using unethical and strong arm business practices during Merlo's tenure have been made. Several states are currently looking into CVS's pharmacy benefits manager (CareMark) use of spread pricing and patient steering”

Larry Merlo - Wikipedia

en.m.wikipedia.org

 

[mentos]

The stock is up 5% LoL

 

[PharFromNormal]

Mixed thoughts. Larry is/was certainly a lightning rod for what people thought/think is the wrong direction of pharmacy. They feel he’s disconnected from the stores and doesn’t know what it’s like currently.

That being said it’s hard to think that out of the gate a non-retail non-pharmacist will have any greater perspective on the current real challenges pharmacists are up against. The new leader of the largest employer of pharmacists is not one. I guess you can view that as good or bad.

 

[Marzapan]

LoL at the pharmacists who think working conditions will be better after Larry Merlo's retirement.

The problems for pharmacists are caused by THEMSELVES (saturation), not by big wigs in corporations. Expect wages, hours cuts and metrics increases to continue.

 

[RxPreceptor]

Well surely I will need to work on/research my stand-up material...I was like totally under the impression Larry would be having us start vaccinating dogs and kitty cats. Got to keep a sense of humor working in retail

 

[PharFromNormal]

LoL at the pharmacists who think working conditions will be better after Larry Merlo's retirement.

The problems for pharmacists are caused by THEMSELVES (saturation), not by big wigs in corporations. Expect wages, hours cuts and metrics increases to continue.

I largely agree with you. I will say however there is a very slim chance that by having a fellow non-pharmacist out of the position of power, it’s one less fellow pharmacist in a position of influence shooting ourselves in the foot. Maybe she’ll be less supportive of donations to pharmacy schools, maybe she will be more willing to give because she can’t rationalize the hardship without being in their shoes at one point.

probably not on all those things but cvs health, or cvs caremark or cvs pharmacy leadership has always historically been of the frugal retail operator mindset because margin and bottom line are king. In the insurance business where margins are often capped in many lines of business and contracts...the top line can reign supreme which brings on a very different culture and mindset. Once she works to get the debt levels in line I’ll be eager to see what she starts doing with the cash. If they keep the dividend frozen where it is, they could start generating a lot or even be more lenient on expense and view it as a top line growth driver.

 

[Marzapan]

I largely agree with you. I will say however there is a very slim chance that by having a fellow non-pharmacist out of the position of power, it’s one less fellow pharmacist in a position of influence shooting ourselves in the foot. Maybe she’ll be less supportive of donations to pharmacy schools, maybe she will be more willing to give because she can’t rationalize the hardship without being in their shoes at one point.

probably not on all those things but cvs health, or cvs caremark or cvs pharmacy leadership has always historically been of the frugal retail operator mindset because margin and bottom line are king. In the insurance business where margins are often capped in many lines of business and contracts...the top line can reign supreme which brings on a very different culture and mindset. Once she works to get the debt levels in line I’ll be eager to see what she starts doing with the cash. If they keep the dividend frozen where it is, they could start generating a lot or even be more lenient on expense and view it as a top line growth driver.

IMO it's going to go the other way if you install a non-pharmacist as CEO. Advocacy for pharmacy "top of license" activities will be completely dismantled because it is EXACTLY as you say - there will be a renewed focus on maximizing the bottom line, not funding activities to further the profession of pharmacy. There will be an even less appreciation for what pharmacists do or CAN do, so the question of "why can't we just replace pharmacists with techs" will have a bigger trickle down effect in rhe organization if you don't have pharmacist advocates at the c-suite level. That's where the real impact is going to be. As for the funding of pharmacy schools, that is still going to happen because 1. it's a tax writeoff and 2. it ensures a cheap labor pipeline so for strategic reasons you wouldn't want to get rid of it.

 

[Rybko90]

IMO it's going to go the other way if you install a non-pharmacist as CEO. Advocacy for pharmacy "top of license" activities will be completely dismantled because it is EXACTLY as you say - there will be a renewed focus on maximizing the bottom line, not funding activities to further the profession of pharmacy. There will be an even less appreciation for what pharmacists do or CAN do, so the question of "why can't we just replace pharmacists with techs" will have a bigger trickle down effect in rhe organization if you don't have pharmacist advocates at the c-suite level. That's where the real impact is going to be. As for the funding of pharmacy schools, that is still going to happen because 1. it's a tax writeoff and 2. it ensures a cheap labor pipeline so for strategic reasons you wouldn't want to get rid of it.

One hundred percent agree with you.

CVS was the only major retailer actually run by a pharmacist.

I don't know how anyone can expect things to get better for pharmacists now that we have a CEO from outside of the pharmacy world.

Look at Walgreens. They are far more blatant for their general disdain for pharmacists than CVS is. The PIC answers to the ... Store manager. Laughable. Walgreens led the way with salary freezes and layoffs, and has been leading the way with lowering entry level salaries and restricting new hires to floater positions.

CVS is now an insurance company first and a pharmacy retailer second. The retail side is the fat, and will be trimmed accordingly.

 

[JustFillIt]

One hundred percent agree with you.

CVS was the only major retailer actually run by a pharmacist.

I don't know how anyone can expect things to get better for pharmacists now that we have a CEO from outside of the pharmacy world.

Look at Walgreens. They are far more blatant for their general disdain for pharmacists than CVS is. The PIC answers to the ... Store manager. Laughable. Walgreens led the way with salary freezes and layoffs, and has been leading the way with lowering entry level salaries and restricting new hires to floater positions.

CVS is now an insurance company first and a pharmacy retailer second. The retail side is the fat, and will be trimmed accordingly.

I worked for Walgreens for 2 weeks. In that 2 weeks I made the store manager my b****.

When I forgot to deadbolt the door I told him that I forgave him for it and he thanked me. I quit shortly thereafter

 

[dmd20000]

I started reading about Biden policies and it is not a joke he is going to screw wealthy people and large corporations including CVS with higher taxes. No wonder why Larry is leaving. Get ready for a tough year with lower profits and more stress.

 

[owlegrad]

Companies love it when they can blame the democrats for the "need" to cut hours, salary freezes, etc. Think of how much worse CVS has gotten in the past 4 years and tell me with a straight face that Biden vs Trump mattered even 1 iota for the pharmacist's job prospects, wages, or working conditions.

 

[Marzapan]

Companies love it when they can blame the democrats for the "need" to cut hours, salary freezes, etc. Think of how much worse CVS has gotten in the past 4 years and tell me with a straight face that Biden vs Trump mattered even 1 iota for the pharmacist's job prospects, wages, or working conditions.

Yeah. The corollary is that even with Trump's corporate tax cuts, pharmacist wages/hours are still being cut. So what makes anyone think that Biden's tax increase on companies will reverse that trend? LoL

 

[owlegrad]

Yeah. The corollary is that even with Trump's corporate tax cuts, pharmacist wages/hours are still being cut. So what makes anyone think that Biden's tax increase on companies will reverse that trend? LoL

I am not sure anyone is making that claim?

 

[WVUPharm2007]

CVS Gains 6% On Raised 2020 Profit Outlook; Analyst Says Hold

Shares of CVS Health Corp. rose 5.8% on Friday after the retail pharmacy chain operator and healthcare services provider reported stronger-than-expected 3Q results and raised its profit and cash flow guidance for the full-year 2020.CVS Health’s (CVS) 3Q adjusted EPS of $1.66 decreased 9.8% from...

finance.yahoo.com

I like to think the stock went up 6% on the news of Merlo retiring

 

[Argentium]

Expect a big change on the executive leadership team for CVS Health with the promotion of Karen with a lot of people leaving and others being promoted. Always surprised by how few people listen to the earnings call transcripts of their employers, when it is readily available. Some interesting highlights from my quick browse of the transcript. Clear that cross-selling within the CVS portfolio is going to be a big driver of growth, along with specialty pharmacy, and vertically integrated medical/pharmacy services.

You are safe if you are part of the growth, you are F'ed if you are the drag on growth

All of the below are direct quotes from Karen/Larry from the earnings call:

1. A few highlights, include: our Pharmacy Services segment delivered double-digit operating income growth versus prior year reflecting strength in specialty along with favorable purchasing economics and our 2021 selling season is wrapping up quite nicely with $3.3 billion of net new business.
   
   
2. As we noted last quarter we launched our next-generation Transform Diabetes Care program designed to improve health outcomes for many Americans living with the condition. Of the 34 million with diabetes nationwide, 1.5 million are Aetna members, over eight million Caremark members, along with 5.5 million customers who fill diabetes prescriptions at a CVS Pharmacy. And our next-gen diabetes solution leverages the CVS Health enterprise. It brings together our advanced data analytics with our clinical, brick-and-mortar and digital assets to provide a comprehensive solution that is personalized, predictive and prioritized. We have built a proprietary analytic data engine to risk stratify our members based on the level of unmet needs of the member, along with the best method for outreach evaluating both clinical acuity and proximity to a CVS Pharmacy. And what's exciting and unique about our solution is that we don't just focus on blood glucose testing. We go well beyond to include health screening, medication optimization and adherence, and comorbidity management.
   
   
   
3. Now in addition to these new and innovative insurance products and clinical service offerings, we are successfully selling more enterprise services to existing clients. For example, we are driving pharmacy penetration in Aetna's book, projecting nearly $300 million in incremental revenue in 2021, as a result of increased demand for our integrated medical and pharmacy offering.
   
   
   
4. Also of notice our pharmacist panel program aimed at actively managing chronic disease. In the U.S., it's estimated that almost two-thirds of adults have at least one chronic condition driving over 80% of annual health care expenditures. And with over 80 million patients filling prescriptions at a CVS Pharmacy annually, we are uniquely positioned to help patients better manage their chronic conditions.
   
   Now we continue to expand pharmacist panels with more than 1,000 stores now active, and this is another first of its kind capability aimed at improving the health of those with chronic conditions by reimagining the pharmacist patient relationship. This capability surfaces individualized clinical insights for our pharmacists through our analytics engine enabling real-time coaching and counseling to close clinical care gaps.
   
   Pharmacist interventions like this are showing promising results, including an 8% lift in adherence, a 4% increase in clinical care gap closure, a 12% reduction in unnecessary ER visits, along with an 8% reduction in out-of-network and non-preferred provider utilization. So we're pleased with these early results and are on track to lower medical costs, improve outcomes and benefit star ratings.

 

[sfachine]

Chains,especially Walgreens are getting deeply involved in specialty drugs where profit margins are spectacular.The 340B program needs serious reform.Is it any wonder Medicare is on its way to financial collapse. I know if I wanted to as a pharmacist I could scam the program easily.Only the stupid and the greedy get caught.