A CVS pharmacy store is seen in the Manhattan borough of New York City, New York.
Shannon Stapleton | Reuters
CVS said Wednesday it plans to acquire or take an interest in a basic-service business by the end of the year as competition from Amazon and Walgreens intensifies.
CEO Karen Lynch said in announcing second-quarter results that the company wants to work with a vendor that has a strong management team and technical background and the ability to grow rapidly.
Best known for its many drugstores, CVS has touch points throughout the healthcare industry. It has acquired insurer Aetna and pharmacy benefits manager Caremark. Customers can obtain vaccines or emergency supplies from MinuteClinic outposts in stores. And the company is adding more healthcare services to those locations, too — it recently launched therapy services in some stores.
However, CVS does not yet have doctor’s offices where patients can go for an annual check-up or appointments with a doctor or nurse. At an investor day last year, Lynch said CVS wants to change that by buying or collaborating with a company.
At that time said Dr. Alan Lotvin, executive vice president of CVS Health and president of CVS Caremark, envisioned CVS making a difference in primary care. The company would like to offer longer opening hours in its doctor’s offices so that people can visit as early as 6 a.m., until 9 p.m. or on weekends. It also wants to use simple, streamlined technology so customers don’t have to fill out mountains of paperwork.
Other healthcare players have already moved into this space. Rival Walgreens Boots Alliance opened hundreds of medical practices in partnership with VillageMD and became the majority owner of the company. Walmart has a small but growing number of clinics where people can see a doctor, dentist, or therapist for a low price.
Amazon added pressure by announcing last month that it would acquire primary care provider One Medical for around $3.9 billion. The boutique healthcare company has 188 medical practices in 25 markets, according to its latest quarterly results.
According to Lynch, CVS has a competitive advantage because of the size of its business. She said nearly 4.8 million customers interact with the company at CVS sites every day. Also, she said, visits to MinuteClinic increased 12% in the fiscal second quarter.
CVS can “build on the strong foundation that we already have,” Lynch said.