Wednesday, December 17, 2014

Highlights of CVS Health’s Latest Specialty Market Forecasts

Yesterday, CVS Health held its annual Analyst Day. The accompanying 224-page slide deck provides great insight into the company’s strategy.

Senior executives told investors how everything is awesome. There is even a section titled “We Made the Right Moves.” (Really.)

CVS Health also provided a wealth of data about the pharmacy and managed care market. Below, I highlight some specialty market projections that caught my eye.

CVS has an unfortunate tendency to change its basis of presentation every year, so be sure to read the slide footnotes to figure out what’s really going on.

Page 68 looks at spending on specialty drugs. Note that the medical benefit spending excludes infused oncology. Presumably, CVS Health doesn’t consider oncology to be part of its “addressable market.” (Note: See page 144 for the company's intriguing hints about "Retail Infusion as the Next Innovation.")
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Page 103 provides another view of industry specialty spend, but this time includes infused oncology. Assuming the data are consistent with page 68, then infused oncology was $41B in 2014, or 32% of specialty spend. By 2018, CVS Health projects that infused oncology will be 35% of specialty spend.
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Page 127 has a nice chart that reinforces the economic value of higher-priced specialty drugs. As CVS Health notes, specialty drugs are a small portion of total medical spending for patients with rare and complex conditions.
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Page 145 highlights the purported biosimilar opportunity. Personally, I’m skeptical that biosimilars will have the same degree of interchangeability as AB-rated generics. We shall see.
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There is plenty of fascinating material in the remaining 220 pages. Enjoy!


Here’s our exclusive video of CVS Health executives explaining the company’s market position and outlook. Click here if you can’t see the video.


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