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CVS Health posted strong revenue and earnings in the third quarter, with profits reaching $2.3 billion, the company announced this week.
Total revenue increased to $89.8 billion for the quarter and $264 billion for the year, an increase of 10.6% year over year. Cash flow generated from operations amounted to $16.1 billion during this period.
Karen Lynch, president and CEO of CVS Health, said in an earnings call that although it had been a “challenging business environment,” the company was committed to expanding access to care and lowering costs for consumers. said it has adapted to changing needs.
A number of factors contributed to the company’s financial performance, including the launch in August of Cordavis, a wholly owned subsidiary that works with pharmaceutical manufacturers to commercialize and/or co-manufacture biosimilar products for the U.S. market. The Cordavis product is expected to receive FDA approval, which CVS expects will ensure a stable, long-term supply of affordable biosimilars.
And in October, CVS announced Aetna’s 2024 Medicare product, the largest Medicare product in Aetna’s history. The company says this includes more choices, flexible benefits, a strong provider network, and simplified medical and prescription drug plans.
The company also announced last month that 87% of Aetna’s Medicare Advantage members are enrolled in 2024 MA prescription drug plans rated 4 stars or higher (out of 5 stars) by the Centers for Medicare and Medicaid Services. did.
CVS also appointed two new members to the CVS Health Corporation board of directors, Scott Kirby, CEO of United Airlines Holdings, and Michael Mahoney, chairman and CEO of Boston Scientific Corporation, in September. In the three months ended March 30, the company returned $779 million to shareholders through dividends. .
what is the impact
The company had an operating profit of $3.7 billion, compared to an operating loss of $3.9 billion a year earlier. This change was primarily due to the elimination of $5.2 billion in opioid litigation costs and a $2.5 billion loss on assets held for sale related to the write-down of CVS’ Omnicare long-term care business.
Adjusted operating profit increased 2.5%. This was primarily due to an increase in the Health Services segment, partially offset by a decrease in the Healthcare Benefits segment. Adjusted operating profit for the Pharmacy and Consumer Wellness segment remained relatively stable compared to the prior year.
Interest expense increased by $127 million, or 22.4%, as debt increased in the three months ended Sept. 30 to fund the acquisitions of Signify Health and Oak Street Health.
CVS Health officially completed its acquisition of Oak Street Health in May. The final agreement was announced in February, with an all-cash transaction totaling approximately $10.6 billion. Oak Street Health is a senior-focused, multi-payer, value-based primary care company with a care model and technology platform that it describes as scalable.
CVS funded the transaction with $5 billion in borrowings from a term loan agreement signed on May 1, as well as existing cash and available resources. CVS Health said it is committed to maintaining its current credit rating.
It’s been a busy few months for CVS, which in January launched Virtual Primary Care, a virtual care service primarily focused on primary care and mental health services. Through this launch, CVS is also expanding its virtual mental health services. Registrants ages 18 and older will have access to nationwide virtual mental health support from clinicians, including certified therapists and psychiatrists.
Email the author: Jeff.Lagasse@himssmedia.com