CVS profits total $6.6B in 2019 following Aetna acquisition

CVS HEALTH EARNED A PROFIT OF $6.6 BILLION IN 2019. / BLOOMBERG NEWS FILE PHOTO/CHRISTOPHER LEE
CVS HEALTH EARNED A PROFIT OF $6.6 BILLION IN 2019. / BLOOMBERG NEWS FILE PHOTO/CHRISTOPHER LEE

WOONSOCKET – CVS Health Corp. posted a profit of $6.6 billion in 2019, or $5.08 per diluted share, according to the company Tuesday.

The company logged a $596 million loss in 2018, or a loss of 57 cents per diluted share. The 2018 years was bogged down by $6.1 billion in write-downs related to the company’s acquisition of Omnicare in 2015.

Revenue for 2019 was $256.8 billion for the year, a 32% increase year over year. The increase in revenue was largely driven by a $54.9 billion increase in premium revenue, related to the acquisition of Aetna that closed in November 2018.

The company’s segment results for 2019:

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  • Pharmacy services segment had a revenue of $141.5 billion, a 5% increase year over year. Total pharmacy claims increased 6.6% from 2018.
  • Retail LTC revenue totaled $86.6 billion, a 3.1% increase from 2018. Total prescription volume increased 5.8% year over year. Same store sales increased 3.7% year over year. Same store pharmacy sales increased 4.5% in that time. The generic dispensing rate was 88.3% for the year.
  • Health care benefits revenue totaled $69.6 billion, a 676.7% increase from 2018. Medical membership totaled 22.9 million, compared with 22.1 million at the end of 2018.
  • The company reported $41.4 billion net negative in revenue in the form of intersegment eliminations, which are related to revenue generating activities between the pharmacy services, retail and health care benefits segments.

“As we work to transform the way health care is delivered to millions of Americans, we are driving continued business performance and generating positive momentum across the enterprise,” said CVS President and CEO Larry J. Merlo. Our fourth quarter and full-year financial results reflect strong financial and operational execution and a successful first year of integrating the Aetna business. We’re using our unmatched capabilities to create a higher-quality, simpler and more affordable health care experience, which benefits patients, clients and consumers and positions the company for continued success.”

Fourth quarter profit was $1.7 billion, an improvement from a $419 million loss in the fourth quarter of 2018. Quarterly revenue was $66.9 billion, an increase from $54.4 billion one year prior.

The company also announced Wednesday that Derica W. Rice, executive vice president of CVS Health and president of CVS Caremark is departing the company effective March 1 and that Dr. Alan Lotvin has been named as her successor as president of CVS Caremark.

Chris Bergenheim is the PBN web editor. You may reach him at Bergenheim@PBN.com.

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