CVS 1Q17 Earnings Call Notes

Larry J. Merlo – CVS Health Corp.

Generics are 87% of scripts

“We effectively purchase generics through Red Oak Sourcing using our size, scale and expertise. And we encourage generic utilization to drive down costs, with generics now comprising about 87% of scripts filled across the enterprise. To more effectively manage the cost of the remaining scripts, we employ sophisticated formulary management tools to ensure that the right patient receives the right drug at the lowest possible cost.”

Jonathan C. Roberts – CVS Health Corp.

Using AI to crawl through claims

The other thing I would add is that there’s been a lot written about the disruption that happens when you move business, and the industry has evolved a lot over the last four or five years. We now have automation, so a lot of these new clients are implemented in an automated way. And then, our testing platform now employs artificial intelligence, where we crawl through the claims and look for anything that’s unusual. And so that has resulted in what I think have been very successful welcome seasons over the last several years. So we’re very confident in our ability to implement new business, large and small.