CVS Health Corp plans to close dozens of its pharmacies inside Target Corp discount stores between February and April as part of a cost-cutting measure to realign its national retail footprint and reduce store and pharmacy density due to rising expenses in its pharmacy and insurance businesses. The closures are part of a broader restructuring plan to streamline operations and reduce costs, and affected employees will be offered jobs at other CVS locations while customers' prescriptions will be transferred to remaining CVS pharmacies.
CVS Health Corp shares fell after the company's management cautioned investors that its adjusted 2024 profit is expected to be towards the low end of its forecast. While maintaining its full-year adjusted profit guidance, CVS's interim CFO advised investors to have conservative expectations for 2024. The drugstore chain reported higher sales and profit in the third quarter, but has been grappling with rising costs in its pharmacy and insurance businesses. CVS also announced a restructuring plan last quarter to streamline operations and reduce costs. Additionally, CVS and its rival Walgreens Boots Alliance Inc. are facing walkouts and protests from their workers.
CVS Health Corp reported better-than-expected quarterly profit, driven by strong performance in its drugstores and pharmacy benefit management business, which offset higher-than-expected medical costs at its insurance unit. The company's health services business, including its pharmacy benefit management, saw an 8% growth in revenue, while its pharmacy and consumer wellness segment recorded a 6% revenue growth. CVS' insurance business also performed well, surpassing estimates in premiums, although medical costs were high due to increased utilization of services. Overall, CVS beat analysts' estimates for both product revenue and adjusted profit per share.
The U.S. Food and Drug Administration (FDA) has issued warnings to eight companies, including CVS Health Corp and Walgreens Boots Alliance, for manufacturing or marketing unapproved eye products. These products are illegally marketed to treat conditions such as conjunctivitis, cataract, and glaucoma, posing an increased risk to users. Some of the products contain silver, which can cause permanent discoloration of the skin and eye tissues. CVS has already halted the sale of its "Pink Eye Relief Eye Drops" and is offering full refunds to customers. The FDA has given the companies 15 days to respond and correct the violations, warning that failure to do so may result in legal action.
Health insurer Oscar Health has announced that Mark Bertolini, former CEO of Aetna, will become its new CEO next month. The move comes as Oscar Health aims to become a profitable insurance business. Bertolini, who sold Aetna to CVS Health Corp in 2018 for nearly $70bn, will succeed Oscar Health co-founder Mario Schlosser, who will take on the new role of president of technology and report to Bertolini. The announcement sent Oscar Health's shares up by about 24%.
