Tom Ryan to retire from CEO post at CVS Caremark
WOONSOCKET, R.I. CVS Caremark chairman, president and CEO Tom Ryan has announced that he will retire as CEO of the company at next year’s shareholder’s meeting in May 2011.
The board of directors is appointing Larry Merlo, president and COO, and anticipates Merlo will succeed Ryan as CEO.
Merlo, a seasoned executive with 31 years of experience, including 20 years with CVS, is also being elected to the company’s board. Effective immediately, Merlo will assume additional responsibilities, including human resources, legal, corporate compliance and government relations. He most recently served as EVP of the company and president of its CVS/pharmacy retail operations, overseeing a portfolio of more than 7,000 CVS/pharmacy locations with net revenues of more than $55 billion.
The company is initiating a search for Merlo’s successor as president of the CVS/pharmacy retail operations, considering both internal and external candidates. Merlo will continue to hold this role until a successor is chosen.
“I felt this was the right time to move forward with our transition plan,” stated Ryan. “In my 36 years with the company, including 16 years as president, I have never felt better about our position than I do now. We have tremendous assets, an incredibly talented management team and a strategy that is resonating in the marketplace. I made my decision knowing that CVS Caremark is in an excellent position and that we have the right team in place to build on our success.
“The plan we are announcing [today] will provide for a smooth, seamless transition in the leadership of CVS Caremark,” added Ryan. “Larry Merlo is a high-energy, customer-focused leader who has delivered outstanding results in every position he has held. He has worked alongside me for the past 20 years and has been instrumental in developing our vision for CVS Caremark as an integrated healthcare company. With his experience and proven track record, Larry is the ideal executive to lead our business forward. Moreover, in Larry and Per, we have two of the most talented and knowledgeable managers in the industry. With their complementary backgrounds, CVS Caremark is in excellent hands.”
To facilitate the transition, the company has formed an office of the chairman including Ryan, Merlo and Per Lofberg, president of Caremark Pharmacy Services, the company’s PBM business. Lofberg, a 30-year veteran of the PBM industry and former chairman of Merck-Medco Managed Care, LLC (which became Medco Health Solutions), joined CVS Caremark in January 2010 to strengthen the PBM business, expand its market position and further develop the company’s integrated healthcare model.
“This is an exciting time for CVS Caremark as our integrated healthcare model gains further traction and we take full advantage of the opportunities to build on our unique market position,” stated Merlo. “In my new role, I look forward to continuing our positive momentum and to further enhancing the long-term value of the company. Tom has inspired our organization to achieve great things, and we look forward to building on his legacy.”
Terry Murray, lead director of CVS Caremark, added, “Tom’s accomplishments at CVS Caremark have been nothing short of spectacular. Under his leadership, CVS has evolved from a regional drug store chain with revenues of $5 billion in 1994 to the nation’s largest pharmacy health care provider with revenues approaching $100 billion. We thank Tom for all he has done over the past 36 years and look forward to his continued leadership during the transition period ahead.”
Medco: Just using LABAs to treat asthma puts patients at risk
FRANKLIN LAKES, N.J. Nearly one-third of patients with asthma are taking their medications in a way that puts them at risk for worsening symptoms and death, according to a new study by pharmacy benefit manager Medco Health Solutions.
The study, by the company’s research and pulmonary therapeutic resource divisions, found that 31% of patients were taking long-acting beta agonists alone, not combining them with other asthma control drugs, despite warnings by the Food and Drug Administration. The drugs, also known as LABAs, include Foradil (formoterol fumarate), by Merck and Novartis, and GlaxoSmithKline’s Serevent (salmeterol xinafoate), the two drugs included in the study. Data from the study were presented at the 2010 Eastern Allergy Conference and coincided with National Asthma and Allergy Awareness Month.
“We’ve identified a gap in care that needs to be shared with the medical community in order to improve patient health and reduce the rate of preventable hospitalizations and emergency room visits,” Medco Therapeutic Resource Centers president Peter Juhn said. “This study demonstrates that specialized care can significantly improve clinical outcomes when treating patients with asthma.”
CVS Caremark’s Pharmacy Advisor seeks to improve diabetes care for PBM clients
WOONSOCKET, R.I. CVS Caremark has launched a new program, Pharmacy Advisor, which is aimed at strengthening pharmacy care for diabetes patients by improving member engagement through enhanced interactions with their pharmacists.
The program is being offered to the company’s PBM clients for implementation in 2011 based on positive results from a recently completed pilot. In addition to improvements in medication adherence rates and closing gaps in care, preliminary data also suggested the program can save employers on their healthcare-benefit costs, with an estimated annual savings of nearly $600 per member with diabetes. In general, a client with 50,000 employees — whose population has an average prevalence of diabetes — could save approximately $3.3 million a year, or up to $6 million a year if there is a high prevalence of the disease, the company stated.
The six-month pilot of the Pharmacy Advisor program was conducted in partnership with a large global steel company in which participating members with diabetes achieved significant improvements in closing gaps in care and medication adherence rates. The pilot program used a multi-step process to identify and counsel members about gaps in care and adherence issues. Results demonstrated that this process closed a significantly higher number of gaps in care compared with a control group who were not counseled (58% and 90% higher for phone and face-to-face counseling, respectively). In addition, members receiving counseling were more likely to be adherent in every targeted medication class.
“Diabetes is one of the most prevalent and expensive chronic diseases in the nation, costing the U.S. an estimated $174 billion a year,” stated Troyen Brennan, chief medical officer of CVS Caremark. “The Pharmacy Advisor program improves clinical care because we are able to identify and address pharmacy-related care issues that if left unattended could result in disease progression and increased health care costs. We are also better able to engage the member in their care through multiple contact points, providing counsel that can improve adherence and help members optimize their pharmacy benefit and find the most cost effective options.”
The Pharmacy Advisor program integrates the benefits of the PBM and the retail pharmacy to improve pharmacy care. The program applies health-information technology to identify members who are being treated for diabetes and engages them with targeted counseling and support through the channels they choose. Member outreach includes educational information, pharmacist-initiated phone calls, or face-to-face counseling with a pharmacist at a local CVS/pharmacy. In addition, evidence-based protocols are applied to review the member’s current treatment and determine if there are gaps in care or issues with medication adherence. Members are also presented with options and solutions to enable them to get the most out of their pharmacy benefit and identify opportunities for cost savings.
The company plans to expand Pharmacy Advisor program offerings to include other chronic diseases and types of interventions in the near future.