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CVS Caremark (CVS - Analyst Report) continues to improve pharmacy care, and its pharmacy benefits management (PBM) franchise. To improve pharmacy care delivery and adherence rates at its pharmacies, the company sharpened its focus on addressing medication non-adherence and associated health care challenges for patients with coronary artery disease (CAD).

According to a study conducted by CVS Caremark and Brigham and Women's Hospital, medication adherence leads to significantly lower risk of coronary artery-related events, mortality, readmissions and costs for patients. The study titled - The Impact of Medication Adherence on Coronary Artery Disease Costs and Outcomes: A Systematic Review, was published in the April edition of the American Journal of Medicine.

The study examined more than 2500 studies published between 1966 and 2011. The researchers scrutinized 25 studies, which met the criteria of medication adherence inclusion and coronary disease outcome. Based on the review, the researchers concluded that medication adherence boosts health outcomes for patients. This is expected to result in annual costs saving in the range of $294 and $868 per patient.

The Bigger Picture

Heart disease is a major cause of death in the U.S. and coronary heart disease is the most prevalent of all heart diseases. According to Centers for Disease Control (CDC), approximately 600,000 Americans die of heart disease annually with over 385,000 deaths due to coronary heart disease.

As per CDC findings, heart disease costs the U.S. economy up to $108.9 billion every year. Notably, annual excess health care costs due to medication non-adherence are approximated at $290 billion. However, these costs can be curbed by driving adherence rates.

Our Take

According to CVS Caremark, it has the highest medication adherence rates relative to other pharmacy retailers in the U.S. The company’s innovative Pharmacy Advisor, a medication adherence program for chronic conditions, already addresses CAD. The company’s flagship PBM program is also available to Medicare clients. We believe that the program should further improve adherence rates and control avoidable health care costs with increasing awareness. However, CVS Caremark faces a tough competitive landscape for its PBM franchise, with Express Scripts (ESRX - Analyst Report) leading the market share.

Due to the lack of positive driving events, estimates for CVS Caremark’s ongoing and next quarter remained stagnant over the last month. Accordingly, the stock carries a Zacks Rank #3 (Hold). While we remain on the sidelines for CVS Caremark, other healthcare stocks, carrying a Zacks Rank #1 (Strong Buy), such as Cyberonics (CYBX - Analyst Report) and Given Imaging are likely to do well.
 

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