CVS Pharmacy App

What Sets Apart the CVS Pharmacy App’s Business Model for Success?

Healthcare is growing rapidly worldwide, and the United States is a leader in making advancements in this field. Even during tough economic times, the healthcare industry remains strong. This means that ideas for healthcare apps have the potential to be successful businesses that are not greatly affected by market fluctuations.

CVS Health Corporation is a notable example of success in the healthcare industry. The company demonstrates how an online pharmacy business can thrive and make a lot of money despite global market challenges.

In this guide, we will examine the business model of the CVS pharmacy app to understand why it is a global leader in the pharmaceutical industry. But first, let’s look at some impressive statistics about the pharmaceutical industry and CVS Pharma.

  • In the United States, pharmacy and drug store sales have reached a total of $324.61 billion, as reported by Statista. According to The Street, CVS is expected to generate overall revenue of at least $366 billion in 2024, surpassing the forecast of around $346 billion by LSEG.
  • In 2022, CVS Health achieved retail sales of almost $106.18 billion, according to another Statista report. The deal value of CVS Health alone reached $17.1 million in 2023, as reported by GlobalData.
  • CVS Health’s annual report highlights that the company has exceeded 2.5 million members and successfully created 6.3 million new digital pharmacy accounts in the United States.

Furthermore, CVS Health has expanded its presence in healthcare benefits, pharmacy services, and the retail industry. The company reported revenues of $91.4 billion from healthcare benefits and $169.2 billion from pharmacy services, as stated in their annual report. According to PWC’s report, the pharmacy and its subsector have a potential revenue range of $225 billion to $275 billion, indicating further growth in the industry.

For entrepreneurs aspiring to capitalize on the pharmaceutical industry, studying the CVS Pharmacy business model is highly recommended. Understanding this model can provide valuable insights for those looking to start an online pharmacy delivery business and stay ahead of their competitors.

CVS Pharmacy Business Model

The CVS Pharma app plays a crucial role in all of CVS Health’s business transactions. This mobile app empowers customers to handle their prescriptions, order refills, access health records, and easily locate nearby pharmacies using their mobile phones. The personalized mobile app is a fundamental element of CVS Health’s digital strategy, contributing to increased customer engagement, loyalty, and user convenience.

The integrated apps significantly contribute to CVS Health’s revenue in various ways:

  • Boosting Retail Revenue: The app drives traffic to the CVS Pharmacy retail segment, contributing to a revenue increase from $100.1 billion in 2021 to $106.6 billion in 2022.
  • Supporting Pharmacy Services: The CVS app supports Caremark, the pharmacy services segment, which saw revenue rise from $153 billion in 2021 to $169.2 billion in 2022. It allows patients to benefit from features such as comparing drug prices and tracking their spending.
  • Complementing Healthcare Benefits: The company’s app complements Aetna, CVS’s healthcare benefits segment, contributing to a revenue increase from $81.4 billion in 2021 to $91.4 billion in 2022. It provides functionalities like viewing insurance coverage, finding in-network providers, and accessing virtual care.

Moreover, the CVS Pharma application is expected to generate additional revenue through commercial ads, partnerships, and data analytics.

Main Elements Of CVS Pharmacy’s Business Strategies

CVS Pharmacy employs diverse channels and platforms to promote its products and services. This includes advertisements on TV, in print media, on radio, across social media platforms, and through in-store displays.

1. Data Collection: The company gathers and analyzes data from various sources, such as patient behavior, transactions, reviews or feedback, loyalty programs, and third-party providers. CVS utilizes this data to optimize its inventory, set drug prices effectively, and refine merchandising tactics.

2. Customer Loyalty: CVS Pharmacy’s business model thrives on building lasting relationships with its customers by providing high-quality pharmacy products and services for their convenience. The Extra Care program is a crucial element, allowing customers to accumulate points with each transaction. These points can later be redeemed for discounts and rewards, enhancing customer loyalty.

Why Does CVS Pharmacy Choose To Invest In A Mobile App?

The CVS Pharma application is meticulously designed to support and implement its profit-driven business model. The customized development of the CVS Pharma mobile app sets a standard for creating online medicine delivery apps that yield significant benefits through their features and functionalities.

  • Prescription Management: The CVS Pharma app facilitates ePrescriptions, allowing users to easily manage their current prescriptions and access information from their past prescriptions.
  • Doorstep Deliveries: User convenience is a priority in the CVS Pharma application. It offers straightforward navigation and simple browsing, enabling users to order pharmacy products online with the added convenience of doorstep deliveries. 
  • Neat Product Listing: The app’s success in the online pharmacy business is partly due to its well-organized product listings. Clear filters and easy visualization of various products make the app a staple on users’ phone homepages.
  • Rewards and Loyalty ProgramsRecognizing the importance of customer loyalty, CVS Health incorporates rewards and loyalty programs into the app. These programs not only retain existing customers but also attract new ones, contributing to the overall success of the business.

How Does CVS Pharmacy Earn Money?

CVS operates in four major segments: retail, pharmacy services, specialty pharmacy, and healthcare innovation. Each segment has a distinct revenue stream, and here are the value propositions for each:

Retail Operations

  • Offerings: Sales of prescription drugs, over-the-counter (OTC) medications, health/wellness/beauty products, and general merchandise through CVS Pharmacy and Longs Drugs stores.
  • Revenue Model: CVS generates revenue through mark-ups on products sold and charges for services such as MinuteClinic visits, immunizations, and health screenings.

Pharmacy Services

  • Offerings: Providing pharmacy benefit management (PBM) services to employers, health plans, and government entities.
  • Revenue Model: Revenue is generated through fees for managing drug formularies, negotiations and rebates with pharmaceutical companies, and claim processing.

Specialty Pharmacy

  • Offerings: Offering specialty drugs and related services to patients diagnosed with complex and chronic ailments (e.g., cancer, hepatitis C, multiple sclerosis, rheumatoid arthritis).
  • Revenue Model: CVS generates revenue through mark-ups on the sale of specialty drugs and charges for clinical support, infusion services, and patient care.

Healthcare Innovation

  • Offerings: Involves the development and commercialization of technologies, data, and analytics within CVS Health.
  • Revenue Model: CVS derives revenue primarily from professional fees associated with providing digital health solutions like remote monitoring through telehealth, chronic disease management, and partnerships with other healthcare entities such as corporate hospitals, healthcare companies, and potential insurers.

Each segment contributes to CVS’s overall business model, offering a diverse range of services and revenue streams within the healthcare industry.

Are You Prepared To Use The CVS Pharmacy App’s Business Approach For Your Own Business?

Are you considering applying the CVS Pharmacy app business model to your own venture? This brief guide is designed to assist entrepreneurs aiming to enter the profitable realm of online pharmacy stores, enhanced by mobile app solutions.

At Gsquare, we are a leading healthcare app development company, specializing in tailoring solutions to meet the specific professional requirements of healthcare setups and providers. If you have innovative healthcare app ideas, we have the perfect solution to transform your concepts into a tangible product.

As a responsible and goal-oriented company, we prioritize adherence to medical standards. Whether you need a mobile app with HIPAA compliance or a secure encrypted Electronic Health Record (EHR) solution, Gsquare is the choice to bring your healthcare app vision to life.

Related Posts

Hiring iOS Developers

May 22, 2024

Step-by-Step Guide to Hiring iOS Developers in 2024

Facebook LinkedIn Pinterest Shares Mobile apps provide significant benefits for businesses worldwide, regardless of their type. To fully leverage these benefits, businesses need to hire skilled developers. Since the introduction of smartphones, iOS and Android have been the leading mobile operating systems, together holding 99.6% of the market share. Despite Apple devices accounting for only

Understanding How EDI Helps Healthcare and Why Businesses Should Care

April 10, 2024

Understanding How EDI Helps Healthcare and Why Businesses Should Care

Facebook LinkedIn Pinterest Shares In healthcare, dealing with lots of different data is hard. The information is spread out in different places, in different ways, and it’s often hard for the important people to get to it. This makes it tough to talk to each other and make decisions. It also raises the chances of

Pin It on Pinterest