CVS Health (CVS) 5 Aug 202020 Q2 Earnings call transcript

Ladies and gentlemen, good morning, and welcome to the CVS Health Second Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow CVS Health's prepared remarks at which point we will review instructions on how to ask your questions.

As a reminder, today's conference is being recorded. I would now like to turn the call over to Valerie Haertel, Senior Vice President of Investor Relations for CVS Health. ahead. go Please

Boratto, good second and this Welcome the and to by and Thank XXXX morning, earnings Health Eva CEO; and quarter Merlo, joined Vice call. CVS President Larry CFO. you, President everyone. Executive I morning am

more prepared Executive a question-and-answer remarks, Alan President Aetna; no of people Vice Jon a a President President President will one Caremark. to Q&A, session Operating to provide Chief Lotvin, host question President the and Vice and In ask Executive and we'll with Executive and question Officer; please order chance our limit more that with the during include Following follow-up. Roberts, Karen Vice yourself Lynch, of quick to than

and and slide during financial forward-looking market that posted we financial enterprise. our In reflect addition to Form make projections on COVID-XX the we industry and to related current events, XX-Q, presentation note that our our this a future website. views, this Please our conditions, call, certain impact will of release future have statements statements call, our to press future our and including performance,

factor are those the disclosures XXXX risk with report in risks Annual of significant filed particular management's and and Forward-Looking forward-looking Form uncertainties, Risk subject the we our on that on Form are XX-K encourage are to and other XX-Q. quarterly Concerning our strongly Health's Cautionary you to including beyond Statements are Our described review projections information these Factors the impact SEC statements factors, and assumptions on estimates, of of COVID-XX CVS on Report based regarding the many control, which future uncertainties the in in Statement enterprise. section We and our and

earnings review also Cautionary Concerning this the in Statements morning's release. should section Statements press You Forward-Looking entitled

to portion earnings will non-GAAP website. broadcast document as and During today's a morning's and financial Relations comparable GAAP one always, be regulations, of of can these our the conditions. the it measures about the Investor we'll website being performance find you use for measures archived reconciliation with this reconciliation financial And company's call, accordance most year. non-GAAP where measures directly is talking in the release on when our posted In SEC on this call

turn Larry. over I'll call Now, to the

to our Thanks, health, you earnings strategy, our you COVID-XX. Having Valerie. power that the and I Good morning in thank as joining is it this of community, model. to providing their hand. needs in for pandemic care new the opportunities solutions necessity integrated power that the and it and offerings in deliver that a and in of preferences. to consumer client meet of expertise, ability capabilities, and our The our The unprecedented earnings social environment COVID-XX home, the has on second transformation everyone the consumer surrounding quarter to many economic in unparalleled and strength deliver in called the environment, past the impacts contribute the diversified is demonstrate said to and and palm have navigate our in rapidly of and of scale have the tell this assets that, business we of accelerating our quarter our at to don’t demonstrate and ways the call. combination footprint made is

more could delivered connections And COVID of more your time, you us care drugstore. health know in not of era this healthcare, where of across at home our community, that assets some for the of palm much been are important. corner than just and this following triad of diverse strategy your in in those Now CVS be who hand the is

and care talk choice, solutions, is needs have greater to apparent, new three proven innovation to that that assets in the community that the potential bringing The well taking core accelerate working, mechanisms just differentiated market. in are and cost, we into will areas and strategy bear, enrollment. COVID-XX our of underscores provide the sustainability. as assets us us in Increasingly, which about and and areas our you meeting of nationwide to to testing interdependencies from more our moment. markedly as We driving BXB reach, strength our today pandemic results with consumer our high-value is clinical testing, diagnostic bend of trial, a recruitment substantially new power that for right, the has solutions which depth growth, share to ranging demonstrate delivery diversification delivering in it's businesses while is driving our There value expanded to solutions has that numerous have the the we'll long-term bringing lower curve made and

with to needs. summarize quarter consumers' our as the and of pandemic let taken clients quickly responsiveness our So that, has and we evolving results proactive great shown steps second and flexibility me light in adapting the have team our

earnings total share adjusted to quarter, revenues $X.XX second the of with per billion. $XX.X For increased

costs, Covid Pharmacy was expenses in modest. segment segment medical Our partially across impact higher which was consolidated related impacts results was significantly from our saw offset the COVID-XX impact performance enterprise positive by core segment. lower very The and in the XX reflect our with business. volume our long-term and our expectations of line healthcare benefits The retail lower care Services COVID-XX in

remarks. to full reach consumer our and clinical will of enabled and strategy, year capabilities, are to healthcare our landscapes. the accelerated us our Eva our we strong and additional number XXXX the data analytics, digital shifts a expertise, consumer and aspects foundation her in coupled of rapidly in address community we with pandemic, provide guidance Now, to $X.XX to In and response of details raising $X.XX unmatched

are deliver expand and And demand For investing want across our ability customers, serve. our and to of in consumers wherever we including testing local of receive this and to to services triad our our with increased offerings areas care. meet our resonating And diagnostic new with quickly pleased where are differentiate it. greatest example, commercial plan are care to sponsors and government highlights communities us we for virtual thousands to our care our the that we we opportunity offerings ability the in customer health see demand how customers

me the So discussing performed work those transition have we to within communities. let

in and the at We key play COVID to CVS operate critical need sites drive-through to testing. a XXXX addressing role swab over testing expand continue We locations, now utilizing send diagnostics. community

with need to Importantly, Social of over support in according CDC's these Index. are Vulnerability locations communities significant XX% the for

our program students populations and organizations through screen integrated that configurable their solution employees to Caremark and our clients. We is test Ready capabilities. their monitor Ready reporting or also recently launched fully end-to-end enables to Return COVID-XXtesting a Aetna Return and

We for XXXX contact on-site a have sectors testing of universities and for variety clients tracing a and well of voer currently over as including offering XX as pipeline clinics such core health the and seasonal demand prospects enrolled, add-on flu. as immunization the and corporations solutions, strong across upcoming safety of

treatment We are to both, populations. in critically also homes we testing testing, for protecting be important rapid launched of Ready continues Testing seniors one our in diagnostic of care long-term in test using diagnostics. for And point-of-care seniors and facilities. vulnerable care Return nursing and long-term most

of the July, this we vaccines of registering developed. recently administered centric COVID-XX health consumer clinical And analytics vast of trials our natural result strategy. digital a service end view approximately and as highly with the launched a through majority assist therapeutic to platform tests patients digital adaptable new million finally, clinical and capabilities. for scheduled treatments digitally are We COVID-XX So as X data as our new with a extension we

provide services value digital these sustainable new will diagnostic and Now our enterprise. for

pharmacy not an pharmacy As XX% previously. example, being tested those of were customers a at CVS

We vaccines available are with them as our Ready once digitally ahead, they become to now look through as with long-term community making we And presence, solutions. COVID-XX with the them customers. objective and as well-positioned long-term well on-site administer CVS care our are we Return connected of

we XXXX. locations states, testing, end We track Now and XXX We in have across HealthHUB in we resumed open XX HealthHUB June evolve mid approximately and our footprint of remain paused and addition open XXXX offerings. continue now the hubs March. by to to to late conversions in on COVID-XX

to at to membership. over indexing Our validation point assets. is of This important member medical our HealthHUBs include some perform increase metrics consumer associated costs through in to visits and the impact group the a XX% ability our relative to an with visits and services facing favorably continue control encouraging chronic our

absolute develop including and integrated that would the shelter was note effect. impacted in remain took as work virtual said, performance the as interested with in Now continue we offerings That I we providers who product quarter place orders strategies. to clients

programs, work our developing also next including utilizing pharmacist continues Our best capabilities. in panel action our

example we XXXX. a as to Advisor an are clients launching new in offering service Health Caremark As

chronic with The medical improve services our out disease network a and confident tests that next we reduction that customers. best in with unnecessary and deliver pilot for enhancing are in based are will panel results significant reflect from We to Aetna's capabilities provider outcomes XX% provide X% non-preferred action our costs coupled pharmacy savings visits, of an along our to ER utilization. reduction designed result lower program, health and on experiences management

differentiator with can this So clients. for be a Caremark real its

This quarter QX we management diabetes next-generation program. our are launching

with large doctors two XXXX. to going clients as broader self-insured Medicare Caremark Aetna and We Aetna's start clients with to are a Group with in rollout

member clinical care across taking Oncology the through And interventions interventions capabilities including Transform conducted enterprise CVS a this addition at glucometers, various individualized in enhancements; locations, and next-generation finally, member pharmacy main remote monitoring another program cost. our Now channels, new and advantage is the of we connected offer level for three HealthHUBs health assets. our currently reduced all program more level, to features across categories,

Now a by growing oncology about CAGR spending $XXX XX%. XXXX to of exceed is projected at billion

will are program adoption area we approximately we given of to commitment practices So systems To move enrollment return this encouraged important will to medical of to vary slowed scale area clearly will oncology COVID, trends. as helping during by oncologist clients the Aetna's The normal. And has savings XX% address lower continue patient as insured is an provider forward. and and differentiator critical cost engaged focus important with eligible type customer a about population date, our be market we across enrolled. early the cost while this XX

of moved health this retail at front our Now QX we store for to delivery versus prescription XXX% care rate. home, our our in and services, when experience continue QX continue to high delivery home attachment is increasing providing focus volume on and home year than we more we because demand up to

versus we Coram pharmacy to home infusion now professionals, patients have In our have addition, providers growth home-based with the driven capacity, care. our in care. an patients cost we more XXX,XXX year-to-date, and hospital home who example therapy transition up of than receiving XX% see help medical who cost collaborating This eligible IV conducted setting. an more savings bed continued to frees for hospitals as include outpatient specialty while capabilities infusions important of where reducing And are at than visits

and we payers and care by service in providers. more through launched demand our our the care make to members increased continue you for insured focusing includes for digital providing called care engagement we by Aetna the This delivery members. delivering their program clinic virtual and our access So through own expect, expand our newly and offerings. In staffed MinuteClinic care care visits continued effective on moving virtual are care we would mini is virtual as cost for channel, E-Clinic to to to hands, video affordable able saw our most

of behavioral variety MinuteClinic health care virtual last XXX% to the needs, care including over are conditions target in in and year. chronic diagnosis of our injuries, of total visits virtual healthcare up compared treatment of QX Our offerings management common the a

In to and innovation diversified clients for So model driven shareholders. on in with we we've our and the with significant our meet evidence strategic consumers delivery seeing our our we are including priorities, generated conclusion and cash tangible us accelerate make our and progress our consumers to demand. we the of to value plan of expect drive many clients, position integrated of consumer business enabled has to And And is value resilient momentum creation. combined to continue model, synergies. aspects integration resonating our continue strong

call with So over me to Eva. turn let the that,

and Thanks, Larry, everyone. are these Echoing times for all. good certainly morning Larry, unprecedented

initiatives. advance our We frontline to integration the synergies cost delivery priorities, savings on product and have and strategic local continuing been supporting the our of service key including while communities innovation,

at performance, Looking our of exceed the of expectations. portfolio enabled assets second to our enterprise diversity our quarter our

$X.XX and underlying with the During XXXX. low as $X.X cash of of the deferral performance, certain reflecting generated quarter billion in we extensions operations, achieving billion payment principle the of repaid leverage we ratio times of the to debt scheduled well COVID-XX payments In related we our as of from target remain deadlines. in tax July, three impact connection committed

divestiture completed to third gross business $XXXmillion approximately our quarter, of proceeds returned $XXX the the This the for is morning. $X.XX dividends in adjusted guidance cash in In the also be remainder about segment. which our have in XXXX, we Benefits compensation drag of to sale through a we workers on shareholders million EPS Care included this We provided expected is Health in

remain said value. laser are may evaluate In priorities. our areas support focused all strategic with delivering Enterprise of the of focus that to previously, identify we As long-term I've long-term continuing and consistent that on assess aspects to not be we

Care of to Care Health growth due growth Health decline from in of primarily segments. segment, coming with revenues Benefits $X.XX, saw pandemic. the unprecedented to EPS X% to majority Moving attributable year-over-year consolidated $XX.X Adjusted grew Benefits the the an P&L, increased Retail/Long-Term and the utilization which to billion our the Care with

execute segment and prescriptions was substantial to provider made investments colleagues in be reduction and $X.XX favorable of impact traffic. consumers, affected Services COVID-XX stores, Care core segment on visits $X.XX. front lower is growth continues to at and Pharmacy underlying quarter in Retail/Long-Term store The due new a second to by our The deliver results quarter. estimated Our therapy the total reduced our to

segment results costs is in primarily to Care our total in made and the reflecting as of requirements, HCB support primarily and provisions clients In regulatory The benefits impact to a investments XX.X%, income to Health related our on our the billion include Benefits elective reduction an membership operating increased $X.X results operating potential to for total plan of products. as increased $X.X driven substantially, of Adjusted in discretionary deferral COVID-XX be procedures turn sponsors for year-over-year, The and by X.X% Let's MBR driven income by government other to of in our unprecedented utilization. contractual segments. customers by members, quarter payments growth providers. operating and and billion. well range estimated revenues for

driven Our our the sequentially, a by partially of by continued medical offset membership commercial grew in by strength products. lives government products, XXX,XXX decline our

Growing and our in pleased sequentially. of extremely star priorities. grew to membership win in ratings, clients differentiated with giving our Advantage our X.X% the capabilities Medicare support are which of to that is will enable integrated strategic us assets Medicare which We competitive success We key Advantage our continued believe service advantages ability continue space. to continue high members this resulting one new

benchmark Part Medicare XX in of in plan received strategy. XXXX for Medicare enabler important are we we qualified of overall where Additionally This D, an pleased with from growth XX year, preliminary our is results the the CMS regions.

to eligibility states suspending grew unemployment. the Medicaid to some as responded membership in increases redeterminations, X.X% pandemic we and Our sequentially by uptick due COVID-XX saw

X.X% headed as Medicaid a sequentially, approximately Commercial with view focus of into pipeline to reflecting continue impact membership declined unemployment. of We a area opportunities strong the XXXX.

have May a in utilization QX, and sponsor and the geography. and claims payable from shelter April mentioned place in the does where were for we not was Base medical previously, of June dates significant normalized XX diversified reflecting as liability anyone portion industry COVID-XX. orders includes A of portfolio or result employer days largely depressed concentration we've of is service claims our significant utilization quarter near saw levels. As a in

price returns in and were Within by in and year-over-year utilization more previously flat as customers a offset to Pharmacy Services losses to specialty to revenues cost compression. Pharmacy Caremark were CVS medication continued Specialty utilization inflation total essentially as We days continue the leader management. disclosed claims brand growth payable largely expect Health decline normal client and recognize levels. as

economics. XX% income increased client Pharmacy revenues, Overall adjusted new channel approximately improvement reflecting existing growth. Pharmacy operating and unfavorably year. in gross year-over-year, reflecting COVID-XX Specialty last X.X%, specialty, quarter continued second and million, PBM operating and increased lower therapy and affected improved purchasing versus result, a services income starts As margins slightly reflects $XX growth performance by costs. I previously, higher news operating mentioned the approximately in

to in negotiate clients and benefits and our Oak enabled Red to our Health. scale expertise, including CVS optimal ability deliver with value Our us from manufacturers, to

remains by our more membership services Medicaid, pharmacy line Our in strong increases in were commercial the given with as in offset marketplace. than expectations reductions position in

not our further assist formulary Services, Zinc allowing ways decisions. the us but Health quarter, cost of further to innovative Health clients the to launched drugs. will reduce make deliver new Additionally, negotiations for in second specialty and entity CVS to new brands manufacturers, will be responsible This with any certain

XXXX This in help industry continue greater strong we even new for $XXX and rate. affordable agility with incremental continuously to XXXX Today, leaders with manufacturing lower our Shifting ultimately Aetna our will are new Services greater billion gross Pharmacy to XX% complete us clients increase and give book the in a with members. renewals continue have approximately pharmacy approximately for revenue. cost medications we season, this won efforts. those to selling $X.X in worked flexibility of business the penetration have While approach retention more within now and we XX% pharmaceutical business approach our deliver make savings, will to and

very pleased these are We with results.

store Moving by volume home revenue the to revenues this and lower provider the size. basket continued Growth dampened have Retail/Long-Term on store in environment, was orders in lower an visits stay significant increase due segment's offset to prescription by due traffic in declined Care, grew impact COVID-XX reduced X% store front quarter. a QX. and at to Front partially total Despite year-over-year. challenging to performance

their sales store progressed, front pressure. to and incurred largely for were the the providing of relaxed impact the XXXX. consistent their of store COVID drug and in medications, Front investments, Overall, of consumers delivery both providing to COVID-XX. declined As as patterns the was purchasing home million. patients to Care attributable $XXX quarter, the keep pharmacy was margins decline result a decline segment colleagues XXX $XXX to contributing return ongoing as home colleague in help In at cleaning stay reimbursement as $XXX versus margins basis results protective with safe. to our well free the we keep prior mix estimate to benefits, stay saw states in Also year. of approximately points orders. relatively as COVID-related as Nearly enhanced Gross the QX Retail/Long-Term due we equipment to approximately the in on the improvement began quarter store segment traffic million half to

our the adjusted $XXX for below Going income effective was was lower reflecting million, line rate contributed tax of tax matters. rate tax The QX expense resolution $X.XX and interest and earnings favorable XX.X% local several state QX. the to about

and metrics environment to we the including key unusual continuing in provide operate, me fluid on update quickly Given some highly are which an let July.

started Pharmacy in to growth benefit June, Services stocking saw Care segments, prescriptions volume refilled we as customers states by followed and the reopening, June, In members Retail/Long-Term from March. prescription accelerate store XX-day growth front from Within July. largely of normal geography levels varies key and back Benefits, Sunbelt in business. on to items obviously returned the and by medical Healthcare treatment in and cost preventative but lines July, up states utilization, June In during

the Moving adjusted and guidance raising tax unprecedented we the in $X.XX to guidance, are impact $X.XX to quarter. reflect favorability our and to rate EPS full-year COVID-XX on surrounding us, acknowledging its the inherent while in experienced the to uncertainty we

timing the to certain XXXX $XX.X liabilities. payments billion, to addition, the flow we our guidance reflecting of of In $XX increasing cash are full-year

normally months to XXXX, from in costs higher the XXXX expect of extended our target Those increase the others, So income meet reducing tax deleveraging in the related operations we payments in on were billion COVID-XX, are as remain times [indiscernible] low that we We initially to cash our the do quarter among and to projected to through the payments half July. planned three our the track first of of six second costs, year. medical reached include debt estimated in and payments XXXX. committed $XX.X second

guidance. our by adjusted additional cadence on provide me earnings and per Let share commentary the of segment

HCB XX% COVID-XX requirements. MLR customers, QX benefiting which $X $X will of about About members, We premium of in and reflected rebates impact HCB's investments incurred XX% expect in was billion $X.X billion billion approximately Approximately contractual year, minimum for including the results. credits, related QX. of was the

year. half we Clearly, investments approximately million with For in expect reflected Retail/Long-Term the will cadence timing Care, million these the $XXX QX. back for affect of the earnings $XXX the large of unemployment well of Furthermore, we investments as Xst. be effective and segment, September of as Care membership in labor a the by ASC Benefits our expect Health loss public to customer affected

membership continue the as We also of expect current a environment. economic to to see in Medicaid result increases

normal be We expect select back half of year COVID-XX more utilization waves. the affected in by continuing at geographies with levels to to the remain

higher addition, In to COVID-XX and related costs we treatment. expect testing

And industry, the to our the Turning of performance the execution of in the expect the deliver business by affected to part segment, to strong be COVID-XX strategy. benefit positioned of in we the strength testing expect second continue our and to capabilities. growth half continued Care, year Retail/Long-Term and year, of the our we specialty assets Pharmacy finally back reflecting the to Services from the G&A continued in expenses

Additionally, remain of second through million we this to improving million in year-to-date enterprise. In deliver our in the in our effects million resilience integration financial our quarter delivering confident reflects synergies, savings to year our $XXX for expect successful summary, line second and the performance. period half gross in cost $XXX of remain We track margins of our $XXX million. on to results the initiatives $XXX integration with

results of deliver this environment to diversified ability the Our our dynamic strength model. of in is evidence

our accessible. make healthcare deliver on and more progress while plan to making strategic continuing are services, products to new and all We affordable

continued sustainable let's generation achieving execution With growth. our cash strong are us open your and propelling that, for long-term Our it questions. up toward

Please go Bank. We'll Instructions] with George our ahead. question first from Hill [Operator take Deutsche

thanks model the morning pretty crisis in reshaped three months. Larry, to of guess, the kind question. COVID dramatically taking the delivery the guys, has good I four Yes, for and last care

and how I about to you how you model change you and want of what the model care kind the the we'd alluded to what talked and HealthHUB to just to impacted strategy. changing And don't little you whitespace love little you a hear of think in pieces think about want and that bit think guess, Aetna how it's but process, to Eva engaging COVID own want You've to what own? delivery delivery about the kind Thank own? the bit about do the the crisis can you is the how portfolio about business, talk through how a you you.

the it speaking to is value of Yes, morning, as for care quality settings. And seeing I that of maybe think start being the going what nontraditional call and think of a describe is, be omnichannel I good trust. would George see emerged I'll George, the acceleration based I'll that thanks question. And convenience we're with delivered to and all in multiple we're for health. to proposition new cost, I on going And elements

of technology broader speaks it that the think a I your care obviously remarks, palm and direct up comfort is your the about morning of question, community, the home. virtual vaccines, you've remote testing, I community what home, and about is acceptance Then there the speaks the monitoring that from talked opportunity diagnostics, obviously and that in what would for the of creates technology and say the with component the in around immunizations. to we to care telemedicine. in hand, opens heard your through George, think a seen care greater around, this door and acceleration that So, to to that there And of our prepared we've in care

months what have nurse the in license. to role has seen we about the level start of to You last to higher regulations pharmacist being the and top with practitioner a the thinking perform their over relaxed that them several allowed of

of in by more you less of when they just our the and to retail So, our backwards, services at it's of we health to to speaks strategy horizon and changes importance look the offering question, pivoting, it as convenient, on related matter and that, asset then that And other see a why thinking of why and trust physical behavioral the administered go health. some feeling about, payment retail. so indirect seeing finally, cannot care. will got but also know to reform retail we've going that examples experiencing anxiety of it's have start a more I costly to years little have a your everything the George, it think lot and the does yes, and more this more integrated providers area growth and many about care. health the is value the see We we challenges of value and that that approach do too people of the talked rapid be over And stress, better. be economically and really pandemic on, way the an we're ignored reimbursement someone we've several based are accelerates last based And to is spark

color. that's Larry, you. Thank great

next from our take will We Bank Cherny go Michael question with of America. Please ahead.

lot this I retail term the do question extra justice. Thank there think you wouldn't so a in pieces specific on normal much ask side. a moving for Clearly, the of question. to is I wanted the quarter

on into incremental of that thought As you new does and making new you how long-term cleaning that process, basis procedures, of you have think about where retail into that in about investments the a type particular the had factor that continue and are might now, beyond? in you're and place, the how should investments framework the dynamics much process XXXX grow staffing

this Jon. Mike, Yes, is

and think we do vaccine I for expect procedures cleaning we get future away. COVID essentially the enhanced that's and So, goes until foreseeable to these a continue

that for pretty HealthHUBs testing significant Larry flu the COVID supports we're healthcare move. pivot we're the making up our repositioning As vaccine services a significant healthcare gearing of be doing, in it to whether we're and a services, the season, said, retail footprint

forward. as it move services higher view we as evolving we health So to care margin

Thanks.

our with take will ahead. We next go Goldwasser Morgan Stanley. from question Ricky Please

- Can of color talk us morning. you for little the just what you vaccine is on your are from side, on you testing to give you good terms you more investors a that And expecting if model turnaround on type dig of vaccine? you're having on you what the we for for season, and vaccine in on about a just deeper new lot wanted getting on early the seeing? magnitude with with see hi, of bit setting into when I administration. administration Thank that are the that. flu comment little to conversations in And manufacturers? share vaccine. first demand flu the the revenue COVID-XX can questions the the in Yes, the a vaccine then testing, are of time role associated We're the

you. insights love to I'd Thank get So your that? on

I'll take to up fall, million start good morning. to what flu It's and ask and Eva for I'll And seasonal your over with question. expect We Yes, there think the vaccines be obvious to increased is an to we last this is Larry Ricky, $XX economic which side going Ricky, in and Ricky, we it the more administered flu then maybe that of look, start flip few than reasons, to administer demand. the years. have - seasonal

to the PSAs think play. importance Ricky, in this never symptoms what play going with plus I of any Ricky that HXNX country, millions we XX there because is our to that state largely we digital going you Americans for us about administer the the role and local for because - are pharmacy you as year across required testing sponsored COVID-XX. back where got prior a seasonal the that administration. where symptoms matter XXXX You're standing the to I the of weeks, the prepared And government the that and lost capabilities a think And a are shift of discussions there vaccine about. an an year talking is be remarks, than Ricky, of is lot in the this model, go it, work with solution prouder out the the became used this schedule actually of can colleagues to of in I'll to to our If of to years more flu sustainable few back, unique vaccines be is, the And important dynamic separate couldn't creates the to locations vaccine appointment level. schedule up of can flu And both some business intersection of our see goes of what test. administration important not absolutely federal a testing the we've Ricky, seasonal by are terms customers us the having and terms of vaccine, in to drive-through try is on the get of in other and I business at in heard also mimic is role we've CVS the we to when

in technology see drive-through our one don't can of eight that cars up available. capability test to become trying six, sites hours vaccines to you bring of digital a get same and when we backed and So scheduling they

an part I testing we're there economics. the Eva be of and flip a solution place So, over to to great on the important think it I'll in

would the Yes, think good diagnostics morning, I say, of typical in it range our Ricky. about and you about overall economics, margin testing as think testing. and

country comment has the and in there quickly you times Ricky, question of testing that. what had terms turnaround I experienced around And on I'll just a think in

heard we took as May in and the million of We turnaround to as in did you our the three-day through that July actions. prepared holiday, well a see June tests times time. of and Xth date. administered months remarks, testing we've immediate the demand The range out in spike were a about X coming spike If in turnaround

was you in increase also we their they as The they the improvement that with a daily back out we as additional some reduce of of tests July number were did is that testing on office if working additional where from we we working results. our the capacity. dramatic to of seen We've a to still improvement the actually made today, labs needs producing were of by holiday. have added basis where one There be the doing first are labs two coming we XX% were thing will, And sit okay, labs. by to

as to and testing. administration same we're Ready in codes for Okay? we sites and to retail today more our testing of the currently the working that with type some remarks, time, you creating point-of-care that of don't talked pivot And working terms retail We're BXB diagnostics testing, also heard exist utilizing with reimbursement we're in at testing the our of the clients. our Ricky, point-of-care about our Return

a important country XX So, as I about to month. where that's testing be going people think a we're million

there be experts, range XX part going need tests million is to month important testing the increased XX that the are timeframe per the at saying million they is solution. an an look in of you fall point-of-care of If more to and to going be

Thank very helpful. you,

Please Nephron next Our with Research. Eric ahead. go from question is Percher

Can HCB? I'd COVID of investment interested you Percher in billion and items $X.X Josh for versus guess like mandatory Raskin voluntary Thank some the you, in and quantify I And impact be here. that the of rebates in Eric specifically investment?

Eric. It's take morning, I'll and Good that Eva question.

What essentially investment $X at our Overall, investments, First, say, the are rebates all X.X those earnings. they but $X.X of the at year those underlying Right? These operating me at in company look our HCB. So, of are the those, affect we're billion support for refunds, as individually, of include level. credits to in members at clients. would I billion to define to that and expenses, level going out items are customers', each HCB. the and what's the breaking company let contributing we not that each

could us you a just with mentioned there Zinc up and are tell and benefits you that any And there? others on Okay. is something partnering what follow tax you are Health,

question. Eva this is tax and I'll start, Zinc with about then what the Alan let I'll start is talk Lotvin, I'll

Eva more times. couple purchasing an a referenced of economics we is that on part customers value So of develop behalf out essentially and that to manufacturers pharmaceutical has the of extract of Zinc and onshore clients created entity the the our as

design just tax Alan Eric not deliver that perhaps did state around as Zinc obvious it's And business as onshore. a as perspective we from said, it's the the strategy, to our CVS. a can value and We customers to

for you Thank that.

Justin Our of go is ahead. next Please Wolfe Research. Lake question from

XXXX I Thanks, of to obviously. lot parts a good wanted for moving followup morning.

business the kind out XXXX and thinking for get fits retail company's then on back off talked - earnings jump rate. So given number in of the still kind XXXX on Is rate is that mid-single-digit mind? your to still that for and in there any to EPS as moving of about kind parts the is what just of right kind helpful Michael's view you everything color view on potential be kind of would growth your instance, the part to wanted question a of going run of of some And this the sort going costs Thanks. of well?

the Thanks Justin. morning, for Good question.

reason jump is are of transparency we would all outside terms performing. the I what understand of the off, provided help the around COVID investment right really of say COVID, In was the the effects the related to community businesses how

how we've far think right, our that you in our performed all been first level, fundamentals through look of with line there's I COVID, for at expectations underlying half the normalizing enterprise trajectory. nothing we've the and the at and strategy taken around if have us our performing year

bridge XXXX would that indicate same [indiscernible]? strategy the versus well So going similar the be trajectory that's as trajectory is to sort of will

Investor what is and when on affecting, our continue core work in how COVID we I our there's, delivering underlying, we'll line you've underlying as outlined said, to at the is but year, to about think we with our Day. expectations Yes, started towards got

thanks. Great,

Please next Jones We'll take Goldman ahead. Sachs. with question Bob our from go

parse questions. what guess, last to the that the a from And Is you exactly it year-over-year. be seeing got be how maybe like the think is the know anything in the just margins amount parse question you're the in points are Eva you're factors thanks results? about even on that expectation out, a as COVID Justin. what's procurement, business, about thinking from for dynamics far excluding few margins does I else areas, down out basis related in hundred mix mean, and as of still you to look for we it's like half just then your highlighted, on gross there I second Great, retail traditional versus areas I those there? line as other can followup anything what maybe But difficult around not. that, year-to-date to extremely cost

thanks. for Thanks the Yes, question.

remarks. go So terms declined a margins said on bit. mix. basis margin, about About the my of call of let what me XXX I'll In prepared nearly half that, in was gross back that of half points, as I segment

So and as at the than by we impacts also as well a there, within with in there's the lower underlying quarter, depressed the in front consumer drug categories, were mix basket faster look which as pharmacy new given disruption rate. the dispensing on mix saw And impact as an store the COVID, purchasing generic you growing the and some patterns health front the sales effects beauty carry prescriptions with higher margin.

when were I year. different it's performing, do think expect of the quarter in all at look how the year-to-date the in margins we and you well for stronger back them if is part you the factors, care performing retail normalize first of to long-term obviously improve

some relative management expand could your That's new care your helpful the program. and that it of comfort up, these evolving any the talked I about program interesting just about on you’re solutions from the on market? that a and diabetes Larry, the if looks then the I new the you landscape do some comments was maybe your really you're you follow to bringing you bit, I on diabetes home, And developing, the wondering the comments of could of and just little if other previous that think like, offerings what thought differentiated one? to was just more digital

retail Maybe in of shelter back the shut programs, as Yes, just orders. our one lot thing place other keep your off just a Avis, care went we through Bob. point mind on other is, that question to extra the in on we

more is on Bob a we programs, diabetes to the terms in contributing why see factor second year. will, the and And those your moving you it more tied normalized then been a trajectory of fashion. in would to the back So the half lot managing have question in a margin turned holistic of if on another on of that's Bob, consumer,

that. example, but we are that condition, glucometers there's today blood comorbidities believe levels about not recognizing as we managing managing connected just is associated glucose remotely with broader So, manage opportunity their a with it's the diabetes it also the much more one

going are we've that cost in those and a focused is are done. we've the on diabetes day the of beyond what bending the seen go those of for curve individuals disease. chronic some drivers And, They real be to believe Okay? with terms programs the at end things we that we're of pilot the that

you. Thank sense. Make

with our Steven We'll Barclays. go Please Valiquette question from ahead. next take

Great, Good everybody. thanks. morning,

goal XXXX? So assumptions the I up stacks X% about now for built that your you the hear expectations. to quarter, of commercial can the posts back into curious there your how And half versus was Thanks. with then any that are are only guidance I around broad the I membership about membership second guess more guess year-over-year in commercial put

losses Good eliminating commercial, that's commercial it's second than had the we quarter. think more doing in in morning we Relative jobs. furloughs Karen. more and to do anticipated saw to Steve, related We companies

each the second similar we that half latter However, the month for to the we're unemployment seeing anticipate we'll losses the we due the for see year as turn commercial of continued of what what we year. as year, corner is you anticipate for although to quarter, in but commercial July emerges, membership saw, rest the of lower in the can

could actions could there. that number right? what government There's uncertainty take the vary, obviously in Steve, And terms of

Okay, And for there's quick that Medicaid just and some adjustments. next around follow-up happen XXXX reimbursement a then some could for just year.

curious overall through or just the just particular? cetera, if is something for within et rounding as the is XXXX assumption guidance as for ones assumptions that a clawbacks material guidance kind of of any within far you far company the your As in XXXX, any that that's guys as the Thanks.

mechanisms you factored so XXXX profits, state tell you in have that would billion. numbers we that that already additional but factored I every gave we any to return, have Eva relative built has it Yes, is, all and that's What to into rounding material. in to on been single Medicaid $X.X not it's the relative

Okay, got it.

Okay, thanks.

significant we within membership Alan. a The seen Steven thing add and uptick in have is reasonably PBMs. Medicaid the it’s lives would our one I

So the book. of diversified you're the shift in seeing power demonstrated broadly that a having

to many we'll operator you we and know of we nine more call And have two questions. at take to another that. want and So, that, be go respectful we'll ahead

SVB Tanal Stephen from question next our take with we'll Leerink. And Please ahead. go

the for National in part Good Thanks pretty sounds the may you solid wins like the morning, have had Aetna It business. account question. some on guys.

have So contributed, that this how follow-up I their any central at them that was part to stage? there of if insured hoping a all, self and at made those clients there's have network wondering and design just whether

did at pharmacy we to we've perspective, National customers relative XXXX, tell give to look compared if pull been, customers, doing HealthHUBs, had really a very season and speaking, times have members of Group membership National National sold generally RFPs four and we our our to integrated would accounts, broad kind value I'd lumpy account fair you until for improved I - National our of but solid will you, their to good clearly What our sales, unemployment. XXXX. XXXX, in We've We reflecting We that accounts interested to story. you some you are account say be had if attrition We've down, in, from from of look retention. flat XXXX. the a penetration and also some I, And for as more relative to our and market year XX% amount our but relative lot are it's back time pharmacy to this to decisions in to last be us. a XX%. integrated the a defer But see

solid the from Medicare. in we've Medicare Group strong high had can growth you the retention and in on However, sales XXXX very side, very expect Group XXs,

similar I'll of to the Steve, comment, Alan ask to in maybe PBM question And selling terms season.

said about XX% a rate sales XX% gross on the $X.X we we through have Yes, new selling retention in in billion the we're as Eva wins. season, general, on have the and so season

health our seen say on just lumpiness about of We where National with overall interesting customers in interest want understand connect to who thought. this HealthHUBs, members community. a season the how the the better COVID, and has specifically not from to but itself The accounts, but been amount with their from in plan haven't, we've also ending we health, I'd up HealthHUBs tremendous

right So, is where very now. the season with sales happy

So the and again, as I said a HealthHUBs. strong interest in

you. thank Helpful,

comes with next the question Please ahead. Lance Wilkes go Bernstein. And from

your on I the on that comment of to and a just business, assets to related in them. turnaround question non-core? Care the as wanted status in there focus assets and non-core any at Long-Term just potential the strategies understand the are other if particularly performance are there, Yes, looking

Lance, Hi, Eva. it's,

what's your do So divested in And, the to have but specific Brazilian is, our let make we our is Workers' evaluate, now I comments me we're us sure where can take marketplace dynamics to seen what any you've continue CVS the I the the that what first, question right? things are portfolio, tell evaluate continue changing operation how thoroughly in second we of you don't we just business. to optimizing terms Comp. we're, in

affected per Long-Term be at Care Right? accept challenges, about seen by of continuing a you se. it's XX% segment the to an as new As been terms industry admissions substantially In down and facilities, we've but look that COVID. industry been performance, facilities obviously, not some has patients, not shutdown

look you profitability. As our to enterprise contributes enterprise, our right, overall less X% than of what overall Long-Term Care at it's bottom-line it's,

really in have we've structure been improvements in there we're this score months. cost managing As I on and related tracking say you also, driving and and continuing And drive over focused leading substantial look right, highlighted, environment, last are we to here. Larry we're this we this leadership, testing XX as our improved this the at aggressively Long-Term business what had vulnerable the highest have since back doing, our Care and we to performance new the patient, opportunities satisfaction would We're service QX to of year, we customer model XXXX. we're COVID made

go off crucial for gratitude and a to, are they work wrap these our of time nation's just we're Okay, sign in times. commitment all across path such our all serve those our effort just history. communities. hard the a And And terms health of in that, our have better especially you, sincere colleagues of thank be and and we commitment me parts that their my to that so, It's working to our here. their And represents let ahead unprecedented lines. with up incredible before on best big of all people proud in to organization, displayed XXX,XXX during front our and able helping

So healthy. safe joining morning please with that, this and thanks us stay again and for

this will conclude quarter today's and earnings And Health webcast. XXXX second CVS call

great and a disconnect day. now may You have