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November 8, 2018

Here's what CVS is including in its own version of 'Amazon Prime'

Daily Briefing

    CVS Pharmacy last week announced it is piloting a new membership program, called CarePass, in Boston that will offer members no-cost deliveries for most online and prescription drugs.

    About the pilot

    The pilot will include more than 350 CVS stores in Boston. CVS will charge consumers $48 annually or $5 monthly to enroll in the membership program for one year. In turn, members will receive:

    • A $10 monthly store credit—which does not rollover, but can be spent on most items in CVS stores;
    • A 20% discount on all CVS-branded products;
    • Access to a pharmacist helpline; and
    • No-cost one- or two-day deliveries for most prescription drugs and online items—with no minimum cost requirements.

    According to CNBC, CVS hopes the membership program will bring more consumers to its stores and drive consumers to purchase more of its products.

    Kevin Hourican, executive vice president of CVS Health and president of the company's retail division CVS Pharmacy, said, "The CarePass pilot program in Boston offers our customers an additional level of benefits and services that make it easy to save time, save money, and receive access to on-demand pharmacy care."

    Hourican added, "We want this to expand nationwide. But we also want to make sure we are ready and prepared and that when we do roll it out nationwide, the program is one that customers can have a great experience with." Hourican said CVS is "committed to designing and testing innovative programs that meet our customers' health needs whenever, wherever, and however they want."

    Pilot seen as attempt to counter competition from Amazon

    According to CNBC, the pilot program appears to be a "bold attempt to fight" competition from Amazon, which offers a similar membership program for consumers to receive no-cost shipping and other services for an annual fee of $119. Amazon also has been making business moves that suggest the company plans to enter the pharmacy business, such as the company's recent merger agreement with the online pharmacy PillPack. The potential merger is viewed "as a major threat to pharmacies because it immediately gives [Amazon] a way into the prescription drug business," CNBC reports (LaVito, CNBC, 10/31; Ellison, Becker's Hospital Review, 11/1; Bomey, USA Today, 10/31).

    What executives need to know about pharmacy

    While historically pharmacy may have been viewed as a cost center, today pharmacy services generate a significant portion of system revenues and are essential to the achievement of strategic system-level priorities.

    To better understand increasingly complex pharmacy issues and the critical role pharmacy plays in overall health system success, download our executive briefings on hot pharmacy topics.

    Download the Briefings

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