CVS Caremark's second-quarter earnings jumped 11 percent to top expectations, as specialty drug use helped fuel growth for the drugstore chain and pharmacy benefits manager.
The Woonsocket, Rhode Island, company also said Tuesday that it was raising its earnings forecast for 2014.
CVS Caremark Corp. runs the nation's second-largest drugstore chain with more than 7,700 locations and one of the largest pharmacy benefits management, or PBM, businesses. Revenue from its PBM side jumped 16 percent, and operating profit from that segment soared 30 percent, helped by new business and specialty drug growth.
Specialty drugs are very expensive, usually injected, drugs for complex chronic health conditions — a category that is driving overall spending on medications. CVS Caremark has started a new program called Specialty Connect that allows customers with these prescriptions to either pick them up at pharmacies or through the mail.
CVS Caremark didn't detail the program's impact on its results, but CEO Larry Merlo said it gives the company a chance to "not just manage the specialty drug but manage the specialty patient." That can lead to better cost control and more business from those patients.
Overall, CVS Caremark earned $1.25 billion, or $1.06 per share, in the quarter that ended June 30. That's up from $1.12 billion, or 91 cents per share, in the same quarter a year ago.
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