Walmart and CVS/Caremark to end PBM contract

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I already made a job aid (we have 4 Medicaid managed care plans in this area that use CVS Caremark) for my team to start referring people to other pharmacies once this goes down.

I do feel badly for other pharmacies that will take scripts from some of our... colorful customers
 
The stock is $63/share now. Glad I sold when it was around $80/share.
 
Will bump this thread in a year. Everyone doubted when I bought GS at 150 too.
 
I bought 300 shares at ~$65 on 12/29. It's posted in the investment thread.
 
My only real competition in our area is Walmart, so this spring should be interesting. They are also notoriously difficult about getting transfers from them. I guess at least corporate will be happy to see the script count bump.
 
My team is prepped to send msss transfers your way via fax.

May the odds be ever in your fsvor
 
I don't get why this made CVS stock go down. People don't choose their insurance carrier. Their employer does. This just forces more people into using CVS or Caremark mail order, whether they like it or not. Win-Win for CVS.
 
WVUPharm2007 said:
I don't get why this made CVS stock go down. People don't choose their insurance carrier. Their employer does. This just forces more people into using CVS or Caremark mail order, whether they like it or not. Win-Win for CVS.
Click to expand...


The CVS "Pharmacy" business portion will probably increase cash flow with more people having to use CVS pharmacy.

BUT....

The CVS "Caremark" business portion can now expect a loss of revenue because it is selling fewer health insurance contracts (to one of the largest retailers) which is how they make money.

The way I would see this is:

PBM contracts that are sold to employers are greater generators of cash flow (profit) than the narrow margin for reimbursements on prescriptions, thus CVS "Health" is going to have a decrease in overall profit.
 
josh6718 said:
The CVS "Pharmacy" business portion will probably increase cash flow with more people having to use CVS pharmacy.

BUT....

The CVS "Caremark" business portion can now expect a loss of revenue because it is selling fewer health insurance contracts (to one of the largest retailers) which is how they make money.

The way I would see this is:

PBM contracts that are sold to employers are greater generators of cash flow (profit) than the narrow margin for reimbursements on prescriptions, thus CVS "Health" is going to have a decrease in overall profit.
Click to expand...

Where are they getting that they will be selling fewer Aetna/Caremark plans? Do they have the contract for Walmart employees?
 
WVUPharm2007 said:
Where are they getting that they will be selling fewer Aetna/Caremark plans? Do they have the contract for Walmart employees?
Click to expand...

Think I might have misread the article- in which case I'm not sure how this would be necessarily bad for CVS unless those prescription reimbursements have such a narrow margin that they are hoping to serve as a loss leader.
 
Less than 5% of affected members use Walmart exclusively for their rxs. It's typical Wall Street overreaction and a great long term buying opportunity.
 
Remember that this is not a done deal; you can think of the CVS press release as a PR stunt.

Also it is unclear what "5%" means as it seems odd that CVS pharmacies wouldn't even take coverage where Caremark is the pharmacy claims processor.
 
Sine Cura said:
I already made a job aid (we have 4 Medicaid managed care plans in this area that use CVS Caremark) for my team to start referring people to other pharmacies once this goes down.

I do feel badly for other pharmacies that will take scripts from some of our... colorful customers
Click to expand...

We were specifically advised not to do this on conference call. Nothing has changed and it's unlikely that they won't reach some kinda deal.
 
If there's one thing H&W is good at, it's being reactionary; the job aid is to help the staff be mentally ready

Any abrupt or imminent change is met with scrambling to cover their asses
 
WVUPharm2007 said:
I don't get why this made CVS stock go down. People don't choose their insurance carrier. Their employer does. This just forces more people into using CVS or Caremark mail order, whether they like it or not. Win-Win for CVS.
Click to expand...
Huh? Plenty of employers offer choices. I work for wags and we get to choose from like a variety of carriers. It's just matter of how much you wanted deducted out of your check. But this was like a year ago...unless things have changed.
 
The walmart near me claims they are not able to fax transfers it has to be verbal.
 
Lnsean said:
Huh? Plenty of employers offer choices. I work for wags and we get to choose from like a variety of carriers. It's just matter of how much you wanted deducted out of your check. But this was like a year ago...unless things have changed.
Click to expand...

I could be wrong, but I've always been under the impression that most people get one choice. Every job I've ever had, you get a choice of which plan or deductible you have, but the carrier is always the same.
 
WVUPharm2007 said:
I could be wrong, but I've always been under the impression that most people get one choice. Every job I've ever had, you get a choice of which plan or deductible you have, but the carrier is always the same.
Click to expand...
Walmart Hawaii offers HMSA (basically BCBS Hawaii PPO) or Kaiser (HMO). If employees have two plan design options, they may offer two different insurers. Aetna, for example, could have offered both.
 
maria1oh said:
The walmart near me claims they are not able to fax transfers it has to be verbal.
Click to expand...
Depends on state law. I can tell you the software doesn’t have the functionality built in, so if you did get faxes, they’d probably be chickenscratch.
 
Not gonna lie that I was looking forward to 60% Rx sold to plan so techs could start freaking out about lost tech hrs

There is a CVS nearby that absorbed the Rx from a closed Rite Aid and another independent in the last year... I think they're relieved too
 
Walmart is the most wuss corporate that I know of. I am 99% confident they are the one who chickened out.
 
WVUPharm2007 said:
I could be wrong, but I've always been under the impression that most people get one choice. Every job I've ever had, you get a choice of which plan or deductible you have, but the carrier is always the same.
Click to expand...

I agree, it is the rare job that gives people a choice. The whole idea behind in employer insurance, the larger the group, the lower the premiums. Allowing people a choice dilutes the group and will make higher premiums, which nobody wants.
 
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