How Does the CVS Pharmacy App Stand Out in Business Success?

 

The global healthcare sector is experiencing rapid growth, with the United States leading the way in pioneering advancements. Despite challenging economic conditions, the healthcare industry remains resilient, presenting opportunities for successful businesses, particularly in the realm of healthcare apps. These ventures are less susceptible to market fluctuations.

CVS Health Corporation stands out as a notable success story in the healthcare industry, showcasing how an online pharmacy business can thrive and generate substantial revenue despite global market challenges.

This guide delves into the business model of the CVS pharmacy app, shedding light on why it has become a global leader in the pharmaceutical industry. Before exploring the intricacies of CVS’s success, let’s highlight some compelling statistics about the pharmaceutical industry and CVS Pharma.

In the United States, pharmacy and drug store sales have soared to $324.61 billion, as reported by Statista. Projections indicate that CVS is poised to achieve overall revenue of at least $366 billion in 2024, surpassing the forecast of around $346 billion by LSEG, according to The Street.

In 2022, CVS Health accomplished retail sales of nearly $106.18 billion, as outlined in another Statista report. The deal value of CVS Health alone reached $17.1 million in 2023, according to GlobalData.

CVS Health’s annual report underscores its impressive milestones, boasting a membership base exceeding 2.5 million and the successful creation of 6.3 million new digital pharmacy accounts in the United States.

Furthermore, CVS Health has expanded its footprint 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 outlined in their annual report. PWC’s report suggests a potential revenue range of $225 billion to $275 billion for the pharmacy and its subsector, indicating further industry growth.

For entrepreneurs aiming to capitalize on the pharmaceutical industry’s opportunities, a thorough examination of the CVS Pharmacy business model is highly recommended. Insights gained from understanding this model can prove invaluable for those seeking to establish an online pharmacy delivery business and maintain a competitive edge in the market.

CVS Pharmacy Business Model

The CVS Pharma app plays a pivotal role in facilitating all of CVS Health’s business transactions. This mobile application empowers customers to manage their prescriptions, order refills, access health records, and conveniently locate nearby pharmacies using their mobile phones. Serving as a cornerstone in CVS Health’s digital strategy, the personalized mobile app significantly contributes to heightened customer engagement, loyalty, and user convenience.

The integrated apps play a substantial role in driving CVS Health’s revenue growth through various channels:

Boosting Retail Revenue: The app effectively directs traffic to the CVS Pharmacy retail segment, resulting in a revenue increase from $100.1 billion in 2021 to $106.6 billion in 2022.

Supporting Pharmacy Services: The CVS app provides vital support to Caremark, the pharmacy services segment, leading to a revenue rise from $153 billion in 2021 to $169.2 billion in 2022. It enables patients to benefit from features such as comparing drug prices and monitoring 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 offers functionalities like viewing insurance coverage, finding in-network providers, and accessing virtual care.

Furthermore, the CVS Pharma application is poised to generate additional revenue through avenues such as commercial ads, partnerships, and data analytics.

Main Elements Of CVS Pharmacy’s Business Strategies

CVS Pharmacy employs a diverse range of channels and platforms to effectively market its products and services. This includes advertising through TV, print media, radio, various social media platforms, and in-store displays.

Data Collection: The company actively collects and analyzes data from multiple sources, including patient behavior, transactions, reviews or feedback, loyalty programs, and third-party providers. CVS leverages this data to optimize inventory management, establish competitive drug prices, and enhance merchandising strategies.

Customer Loyalty: CVS Pharmacy’s business model centers around fostering long-term relationships with customers through the provision of high-quality pharmacy products and services for their convenience. The Extra Care program plays a pivotal role, allowing customers to accumulate points with each transaction, which can later be redeemed for discounts and rewards, thereby strengthening customer loyalty.

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

The CVS Pharma mobile application is intricately crafted to support and execute its profit-centric business model. Setting a benchmark for the development of online medicine delivery apps, the app offers significant benefits through its tailored features and functionalities.

Prescription Management: CVS Pharma app streamlines ePrescriptions, allowing users to effortlessly manage their current prescriptions and access information from past ones.

Doorstep Deliveries: Prioritizing user convenience, the CVS Pharma application ensures straightforward navigation and simple browsing, enabling users to conveniently order pharmacy products online with doorstep deliveries.

Neat Product Listing: The app’s success in the online pharmacy sector is attributed in part to its well-organized product listings. Clear filters and easy visualization of various products make the app a go-to choice on users’ phone homepages.

Rewards and Loyalty Programs: Recognizing the value of customer loyalty, CVS Health integrates rewards and loyalty programs into the app. These initiatives 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 across four key segments: retail, pharmacy services, specialty pharmacy, and healthcare innovation. Each segment has its unique revenue stream, and the value propositions for each are as follows:

Retail Operations

Offerings: CVS provides 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: CVS offers 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: CVS provides 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: CVS is involved in 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 plays a crucial role in contributing to CVS’s overall business model, offering a diverse range of services and revenue streams within the healthcare industry.

Are you ready to adopt the business approach of the CVS Pharmacy app for your own business?

Are you contemplating adopting the business model of the CVS Pharmacy app for your own venture? This concise guide is crafted to aid entrepreneurs aspiring to enter the lucrative domain of online pharmacy stores, complemented by mobile app solutions.

At Gsquare, we stand as a premier healthcare app development company, specializing in customizing solutions to cater to the specific professional needs of healthcare setups and providers. If you possess innovative healthcare app ideas, we offer the ideal solution to translate your concepts into a tangible product.

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