In This Article:
CVS Health (CVS) is maintaining Thursday gains ahead of the closing bell after outpacing top and bottom line expectations, paired with a positive full-year outlook for 2025.
Yahoo Finance senior health reporter Anjalee Khemlani joins the Market Domination in breaking down the pharmacy chain's reaction to Medicare Advantage costs and its formulary deal with GLP-1 weight-loss drug developer Novo Nordisk (NVO). She highlights comments from CVS CEO David Joyner on the Novo Nordisk deal.
Jefferies equity research analyst Brian Tanquilut explained to Yahoo Finance why it is looking like a "new day" for CVS on these earnings and guidance prints.
To watch more expert insights and analysis on the latest market action, check out more Market Domination here.
Well, CVS Health shares getting a lift as the company tops first quarter earnings estimates and boosts its profit outlook for the full year. Joining us here with more is Yahoo Finance's very own, Anjalee Khemlani.
That's right. You can see the stock up really significantly on the day, and that is because in large part it beat Wall Street estimates, but also has this really interesting, uh, new relationship with Novo Nordisk is claiming it as the exclusive partner for its formulary for the GLP-1s. That's for weight loss. Um, there's also some other news around CVS with it, uh, exiting, uh, advantage, uh, sorry, affordable care act marketplaces. And that's something that's interesting as well because we've seen that as sort of a trend where some of the major players in this space have left, definitely left the the space. And that could bode poorly for consumers in the upcoming, uh, years. Medicare Advantage costs are a little bit more realigned now. So that's something good to look forward to. But going back to this CVS Novo Nordisk deal, that is, of course, the talk of the day. If you've seen Lily stock, it has taken a beating because of its competitor getting this deal. And what the deal entails is that self-pay, uh, patients will now get to buy the Wegovy product at CVS for that discounted $4.99 that we used to previously see just on telehealth platforms. Meanwhile, Zebound has been excluded from the formulary. So that means it is going to miss out on those patients being steered towards it. I had a chance to sit down with, uh, CEO of Eli Lilly, and he did say to me that this is something that he sees as a little bit quote last decade. And so kind of indicating that he's not interested in this move and looking at it really from the perspective of, you know, including all points of access that includes other telehealth platforms, and we've seen Lily Direct do just that. But I also got a chance to speak to CVS CEO, the new one, David Joyner. He's not new to CVS, of course, so was previously leading the PBM, uh, uh, business unit. So, of course, knows all about this. And his take on this was that it is actually a way to help CVS, uh, get access at a lower cost price for, of course, the formulary placement. Here's what he had to say.
This is the first breakthrough in our relationship with Novo that allows us to have a discounted product in the retail setting, um, to be able to reach the consumer directly. And up up until now, that has not been an option. And so it is a significant change from a business practice. For otherwise we would have had to sell at the wholesale acquisition cost, which would have been north of $1,000, and most consumers are simply not going to pay the, you know, the list price for uh, for the products.
I spoke to some analysts who also said that this was something that CVS pursued, and Eli Lilly seems to be essentially waving it off, and it might not result in sort of this price war that would ensue if Lily does go ahead and create some sort of a similar deal with another PBM.
What about the partnerships with though, like the telehealth platforms? How do they fit into all of this? Because I mean, they're competition for this also, right?
They are and are not. So they have those separate relationships with, uh, Novo Nordisk and Eli Lilly. And through those platforms, you have the providers essentially writing those prescriptions that get those direct, um, they're directly selling to the consumer from there. So that cuts out some of these middlemen in in essence. Uh, we have heard from, you know, some of those larger telehealth platforms like Hims and Hers and Ro. Those were previously selling the compounded products. So this is a move to get them away from that, essentially.
Right. Okay.
Yeah.
Thank you, Anj. Appreciate it.