Why CVS Stock Trounced the Market Today
Key Points
It is to start participating in a Medicare discount program for such medications, among other measures.
This will help make it the go-to pharmacy for many users of weight-loss drugs.
CVS Health (NYSE: CVS) is pushing harder into a hot segment of the pharmacy market, and on Monday investors rewarded the company for the effort. The pharmacy retailer's stock rose 3% on the news, contrasting very favorably with the slight (0.2%) decline of the bellwether S&P 500 index.
Weight loss equals business gain
That morning, before market open, CVS announced it is expanding support for GLP-1 weight-loss medications across its many U.S. pharmacies and MinuteClinics.
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This includes more pharmacy support to improve access to such medications for patients and help them maintain their regimens. CVS added that it has introduced a new specialty MinuteClinic virtual visit offering focused on GLP-1 prescription and administration, priced at $49 per visit.
More importantly, on July 1, CVS will begin participating in the Centers for Medicare & Medicaid Services' (CMS) Medicare GLP-1 Bridge Program, a federal discount initiative.
In the press release touting the new offerings, CVS quoted its interim president of pharmacy and consumer wellness, Sid Tenneti, as saying that "Access is only part of the equation with GLP‑1 medications. Patients also need support to stay on therapy and see results."
Getting them to the pharmacy counter
American consumers can't get enough of obesity medications, so CVS is right to bulk up its GLP-1 services. I feel that the Bridge program discount will be a particularly attractive draw for qualifying patients, and overall, this expansion will provide a lift to CVS's business. Just now, this company looks like one of the best -- if not the best -- U.S. pharmacy stock.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends CVS Health. The Motley Fool has a disclosure policy.