KHN Morning Briefing

Summaries of health policy coverage from major news organizations

CVS Caremark Profits Up In Fourth Quarter

The retail pharmacy weathered the wave of generic drugs.

The Wall Street Journal: CVS Caremark Raises Outlook
CVS's retail pharmacy business gained customers last year in the wake of a contract dispute between rival Walgreen Co.'s and pharmacy-benefits manager Express Scripts Holding Co. that has since been resolved. A wave of major generic drugs introductions is having a mixed effect on the industry. Though the copycat drugs carry higher margins than branded products, they command lower prices, hurting sales revenue (Stynes, 2/6).

The Associated Press: CVS Caremark's 4th-Qtr Profit Rises 6 Pct 
Overall, one of the nation's largest drugstore chains said revenue climbed nearly 11 percent in the quarter to $31.4 billion, even though a wave of generic drugs recently has been hurting topline growth for drugstores and pharmacy benefits managers, which run prescription drug plans for employers, insurers and other customers. Generic equivalents to top-selling medicines like the cholesterol fighter Lipitor hurt revenue for these companies because they are cheaper than their brand-name counterparts. But they boost earnings because they come with a wider margin between the price drugstores and PBMs pay to buy them and the reimbursement they receive for doling them out (Murphy, 2/6).

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