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CVS Caremark readies for swell of newly insured

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Tuesday, Feb. 26, 2013, 9:21 p.m.

CVS Caremark Corp. is positioning itself as a primary access point for many uninsured people who will be getting health insurance for the first time next year under health care reform, the company's CEO said on Tuesday in Pittsburgh.

Larry Merlo, a Charleroi native and graduate of University of Pittsburgh's School of Pharmacy, said the nation's largest drugstore chain can have a critical part in improving access to health services while improving quality and reducing costs.

“Pharmacy will be on the leading edge of addressing the quality, cost, access conundrum,” the CEO told about 100 people attending a meeting of the Economic Club of Pittsburgh in the Omni William Penn hotel, Downtown.

Woonsocket, R.I.-based CVS Caremark employs about 2,600 workers in the Pittsburgh region at 56 drug stores, a mail-order facility and operations and information technology centers in O'Hara, specialty pharmacy operations in Wilkins and Robinson, and a regional business office in Swissvale.

In addition to its 7,400 retail pharmacies in more than 40 states, the company manages pharmacy benefits for company health plans and their 60 million members. And it is increasingly adding its own health clinics inside its drug stores to provide basic medical services.

It has 640 MinuteClinics inside CVS stores and plans to expand to more than 1,000 clinics in the next three years, Merlo said. The company also adding about 150 to 200 CVS pharmacies a year.

CVS and Walgreens compete for the title of the nation's largest pharmacy chain in the number of locations and prescription revenue.

That reach should allow the company to help provide medical services to the 30 million people who are expected to gain health insurance for the first time when the federal Affordable Care Act goes into full effect next year, Merlo said.

One of the biggest areas where Merlo said he thinks CVS can impact health care costs is with prescription adherence. One in 3 patients will stop taking their medication before going back for their first refill, he said.

Non-adherence to prescriptions costs the health care system $100 billion to $289 billion a year, because patients who aren't taking their medications get sicker and end up back in the hospital or doctor's office, according to a study published last year in the Annals of Internal Medicine.

About 20 percent to 30 percent of prescriptions are never filled, and half of medications for chronic diseases — such as diabetes or high blood pressure — are not taken as prescribed, the study found.

Merlo believes his company can help increase compliance. It is running outreach programs to customers to make sure they receive refills and continue to take their drugs.

Medicine adherence, Merlo said, is “the biggest and most underutilized weapons in reducing costs.”

Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or

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