CVS Health said it will close 900 of its drug stores over the next three years as it tries to adapt to changing customer preferences by focusing on new in-store business models that deliver more health services, as the company, famous for its pharmacies, has more than 9,900 pharmacies and has been planning to expand its offering of services since its acquisition of health insurance company Aetna in 2018.
As part of its strategic vision, the company will create an upgraded version of Health Service Centers that provides treatment for common ailments as well as chronic care to a larger number of customers, but reducing its store numbers will cost it $1-1.2 billion in impairment compensation in the fourth quarter.
As part of its new strategy, CVS has also created a new position called Executive Pharmacy Director and has appointed a Vice President specializing in pharmacy and product innovation.
Competitor Walgreens Boots Alliance recently shifted its focus beyond drugstores with an investment of $5.2 billion in VillageMD and $330 million in home and post-acute care services company CareCentrix. Read more [Walgreens’ Fourth-Quarter Results Beat Expectations].
CVS lowered its 2021 earnings per share outlook from $6.1-6.23 to $5.46-5.67, but maintained its adjusted earnings view, saying that drug closures would have no impact at all this year and next, but it is worth noting that the company has published strong results and lowered its expectations earlier this month. Read more [CVS Health Posts Strong Results Supported By Prescription].