Q1 2024 CVS Health Corp Earnings Call Transcript
Key Points
- CVS Health Corp (CVS) reported a revenue increase of approximately 4% year-over-year in the first quarter, reaching about $88 billion.
- The Pharmacy & Consumer Wellness segment showed strong performance, with revenue growth of nearly 3% compared to the previous year, driven by increased prescription volume and contributions from vaccinations.
- CVS Health Corp (CVS) implemented significant formulary changes related to Humira, successfully dispensing more biosimilar Humira prescriptions in the first month than the entire U.S. market in 2023, highlighting the strength of CVS Caremark, CVS Specialty, and Cordavis businesses.
- The company has seen strong enrollment growth in Medicare, Individual Exchange, and Commercial group products, with medical membership increasing by 1.1 million members sequentially to 26.8 million.
- CVS Health Corp (CVS) has been actively engaged in enterprise productivity initiatives to streamline and optimize operations, aiming to align costs with business operations and conditions.
- CVS Health Corp (CVS) experienced utilization pressures in Medicare Advantage, significantly impacting the Health Care Benefits segment and leading to a lowered full-year 2024 guidance for adjusted EPS.
- The first quarter adjusted EPS of $1.31 fell short of expectations, prompting a revision of the full-year earnings outlook.
- Medicare Advantage trends were notably above expected levels, exacerbated by a cyberattack on Change Healthcare, leading to a reserve of nearly $500 million for estimated unreceived claims.
- The Health Services segment saw a revenue decrease of nearly 10% year-over-year, primarily due to the loss of a large client and ongoing pharmacy client price improvements.
- CVS Health Corp (CVS) faces challenges in the Medicare Advantage market, including insufficient rate notices and changes prescribed by the Inflation Reduction Act, which may disrupt benefit levels and choices for seniors.
Hello, and welcome to today's CVS Health Q1 2024 Earnings Conference Call. My name is Jordan, and I'll be coordinating your call today. (Operator Instructions)
I'm now going to hand over to Larry McGrath to begin. Larry, please go ahead.
Good morning, and welcome to the CVS Health First Quarter 2024 Earnings Call and Webcast. I'm Larry McGrath, Senior Vice President of Business Development and Investor Relations for CVS Health. I'm joined this morning by Karen Lynch, President and Chief Executive Officer; and Tom Cowhey, Chief Financial Officer.
Following our prepared remarks, we'll host a question-and-answer session that will include additional members of our leadership team. Our press release and slide presentation have been posted to our website, along with our Form 10-Q filed this morning with the SEC. Today's call is also being broadcast on our website where it will be archived for 1 year.
During this call, we'll make certain forward-looking
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