CVS affirms outlook, says California partial contract termination ‘immaterial’

CVS Health said it understands that Blue Shield of California announced today, as part of a new pharmacy care model, that it will use a number of pharmacy service providers beginning in 2024. CVS said it will continue to provide specialty pharmacy services. “The financial impact associated with the partial termination of the Blue Shield of California contract is not expected to have an impact to our previously issued 2023 guidance and is expected to have an immaterial impact on our longer-term outlook,” the company said in a regulatory filing. CVS Caremark added it “remains the leading pharmacy benefit manager in the United States, serving more Americans and more health plans today than any of our competitors.” It adds, “We are pleased to continue to serve Blue Shield of California customers for their specialty pharmaceutical needs. Specialty pharmacy spend now represents over 50% of pharmacy benefit spend in the marketplace.” CVS Health reaffirms its 2023 adjusted EPS range of $8.50 to $8.70 and cash flow from operations range of $12.5B to $13.5B. The 2023 consensus earnings estimate is $8.59. CVS shares are down 8% to $66.57 in afternoon trading.