CVS Upbeat on Adherence Study - Analyst Blog
March 21 2013 - 12:24PM
Zacks
CVS Caremark (CVS)
continues to improve pharmacy care, and its pharmacy benefits
management (PBM) franchise. To improve pharmacy care delivery and
adherence rates at its pharmacies, the company sharpened its focus
on addressing medication non-adherence and associated health care
challenges for patients with coronary artery disease (CAD).
According to a study conducted by CVS Caremark and Brigham and
Women's Hospital, medication adherence leads to significantly lower
risk of coronary artery-related events, mortality, readmissions and
costs for patients. The study titled - The Impact of Medication
Adherence on Coronary Artery Disease Costs and Outcomes: A
Systematic Review, was published in the April edition of the
American Journal of Medicine.
The study examined more than 2500 studies published between 1966
and 2011. The researchers scrutinized 25 studies, which met the
criteria of medication adherence inclusion and coronary disease
outcome. Based on the review, the researchers concluded that
medication adherence boosts health outcomes for patients. This is
expected to result in annual costs saving in the range of $294 and
$868 per patient.
The Bigger Picture
Heart disease is a major cause of death in the U.S. and coronary
heart disease is the most prevalent of all heart diseases.
According to Centers for Disease Control (CDC), approximately
600,000 Americans die of heart disease annually with over 385,000
deaths due to coronary heart disease.
As per CDC findings, heart disease costs the U.S. economy up to
$108.9 billion every year. Notably, annual excess health care costs
due to medication non-adherence are approximated at $290 billion.
However, these costs can be curbed by driving adherence rates.
Our Take
According to CVS Caremark, it has the highest medication adherence
rates relative to other pharmacy retailers in the U.S. The
company’s innovative Pharmacy Advisor, a medication adherence
program for chronic conditions, already addresses CAD. The
company’s flagship PBM program is also available to Medicare
clients. We believe that the program should further improve
adherence rates and control avoidable health care costs with
increasing awareness. However, CVS Caremark faces a tough
competitive landscape for its PBM franchise, with Express
Scripts (ESRX) leading the market share.
Due to the lack of positive driving events, estimates for CVS
Caremark’s ongoing and next quarter remained stagnant over the last
month. Accordingly, the stock carries a Zacks Rank #3 (Hold). While
we remain on the sidelines for CVS Caremark, other healthcare
stocks, carrying a Zacks Rank #1 (Strong Buy), such as
Cyberonics (CYBX) and Given
Imaging (GIVN) are likely to do well.
CVS CAREMARK CP (CVS): Free Stock Analysis Report
CYBERONICS INC (CYBX): Free Stock Analysis Report
EXPRESS SCRIPTS (ESRX): Free Stock Analysis Report
GIVEN IMAGING (GIVN): Free Stock Analysis Report
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