CVS continues to “work diligently in driving growth for the assisted living space” through its Omnicare long-term care pharmacy business, CVS President and CEO Larry Merlo said Wednesday during the company’s first-quarter earnings call.
The company’s retail / long-term care segment experienced a 23.8% decrease in operating income in the quarter. An 18.9% decline in adjusted operating income, to $1.5 billion, was expected and was due partly to the year-over-year performance of the long-term care business, Executive Vice President and Chief Financial Officer Eva Boratto said.
CVS expects adjusted operating income in the retail / long-term care segment to be $6.63 billion to $6.71 billion for the full year, she said.
“We do expect Omnicare performance to improve as we go forward,” Boratto said.
Merlo described the quarter’s 5.5% increase in adjusted prescription volume in the retail / long-term care segment, compared with 2018, as “healthy.” A total of 346.8 million prescriptions were dispensed.
“Our long-term care business is on track to achieve our targeted margin improvements, given our cost management efforts,” he said.
Total retail / long-term care segment revenues for the quarter were $21.1 billion, a 3.3% increase compared with the first quarter of 2018. Revenue growth, CVS said, primarily was driven by increased prescription volume and brand-name drug price inflation, which were partially offset by continued reimbursement pressure and effects of the introduction of generic medications.
Overall, revenues for CVS increased 34.8% to $61.6 billion in the first quarter, operating income increased 34.8% to $2.7 billion, and adjusted operating income increased 56.8% to $3.6 billion.