Name: Watch CVS Health CEO Larry Merlo Discuss The Company's Powerful Response to Opioid Epidemic
Uploaded: 2019-12-18
Duration: 5 min 12 s
Description: Pharmacy chain has the tools to begin formulating solutions to America’s crisis.

 Larry, it's been a couple of weeks now since you announced that CBS would limit opioid prescriptions to a seven-day supply compared to something 18. You got everybody's attention on this. What's been the reaction? What have you been hearing from everyone? Susie, the reaction has been extremely positive from the community at large. People talking about their personal experiences. And the fact that what may have started something very innocent for some acute injury ultimately led to addiction. And the belief that if they had gotten off of those opioids sooner, that never would have happened. Doctors don't like to be told what to do. You didn't get any pushback from physicians? I would say that the physician community has been largely supportive. Everyone recognizes that this opioid epidemic that we're all dealing with, it's crying for a solution. And all of us as health care stakeholders. We need to do our part to begin to reverse this trend that we've seen emerging now for many years. What about the pharmacies? What have you heard from your competitors? Yeah, there's a lot of discussion taking place in the industry. And I do believe that there's reason for optimism that many of our competitors will join us in this effort to be an important part of the solution. So you really do think they're going to join you. Because when CBS cut out tobacco and cigarette sales and all of its stores, there weren't many fast followers. Cigarettes are a very serious health care issue, so is the opioid crisis. Do you think that this time it'll be a little different? Susie, I certainly can't speak for the decision that they'll make. But there is a lot of good discussion taking place. And I do believe that there's optimism that we can create an industry solution out of this. Did you pick up the phone and call your counterpart over at Walgreens or Walmart and say hey, guys, come on board? Well, we've had members of my team talking with their counterparts in these respective competitors. So there has been a very collaborative conversation taking place. You have said all along that you're open to having more competition coming in to the pharmacy business, and into the drug selling business. I want to talk to you a little bit about Amazon because as you know the word is out that they could get into the drug selling business online. What are your thoughts about that? We shouldn't think of pharmacy as if we're buying a book OK or a television. There is a product component of pharmacy. There's a service component of pharmacy. And the role that our pharmacist play across the country, we have almost 10,000 pharmacies about 80% of the US population lives within a few miles of a CBS. And I do believe that you know the service component recognizes some that you know would be to some degree barriers to entry. And certainly, if Amazon or any other competitor decided to enter that space, I'm confident that you know as our business continues to evolve will continue to be an effective competitor. The people who are familiar with what Amazon might be doing are saying that one of their strategies might be to eliminate the middleman. And that would involve companies like CBS. And then pass along those savings right to the consumer. And also come up with ways that consumers could do comparison shopping when it comes to drugs. How could CBS compete against something like that? Yeah, Susie, I think CBS health has created a very unique model. And that we operate retail pharmacies. We have a PBM with specialty pharmacy. We have many different assets that together they form know what we like to refer to as the front door to health care. I think the opportunity for us and it's what we've been working on what we continue to work on is, how do we connect the dots across all of those different assets to bring innovation and create some type of differentiated experience? So I think that's a little bit what exists within our secret sauce and what we'll continue to work on. We talk so much these days about being a disruptor or being disrupted. How do you think Amazon could disrupt the drug selling marketplace? Certainly, one of Amazon's core capabilities as their delivery and customer experience, they do a very good job with that. Mail order pharmacy, it already exists in the US from CBS, as well as others. So I think that there are opportunities to you know effectively compete. And I'm confident that we'll be able to do that if there are any other new entries enter the marketplace. 

Watch CVS Health CEO Larry Merlo Discuss The Company's Powerful Response to Opioid Epidemic

Health

Pharmacy chain has the tools to begin formulating solutions to America’s crisis.

Larry. It's been a couple of weeks now since you announced that CVS would limit opioid prescriptions toe a seven day supply compared to something like 18. You got everybody's attention on this. What's been the reaction? What have you been hearing from everyone? Yes, since the the reaction has been extremely positive from the community at large. People talking about, you know, their personal experiences and the fact that what may have started something very innocent for some acute injury, you know, ultimately lead to addiction and the belief that you know, if they had gotten off of those opioids sooner, you know, that never would have happened. Doctors don't like to be told what to do. You didn't get any pushback from physicians. I would say that the physician community has been largely supported. Everyone recognizes that this opioid epidemic that we're all dealing with, you know, it's crank for solution. And you know, all of us as health care stakeholders, we need to do our part to begin to reverse this trend that we've seen emerging now for many years. What about the pharmacy? What have you heard from your competitors? Yeah, there's a lot of discussion taking place in the industry. And I and I do believe that there's reason for optimism that many of our competitors will will join us in this effort to be an important part of the solution. You really do think they're gonna join you because, you know, when you, uh when CBS cut out tobacco and cigarette sales in all of its stores, there weren't many fast followers. Cigarettes are very serious health care issue. So is the opioid crisis. Do you think that this time it'll be a little different? You know, Susie, I certainly can't speak for the decision that will make that there is a lot of good discussion taking place in, and I do believe that, you know, there's optimism that we can create an industry solution out of this. Did you pick up the phone and call your counterpart over at Walgreens or Walmart and say, Hey, guys, come on board What? We've had members of my team talking with their counterparts in these respective competitors, so there has been a very collaborative conversation taking place. You have said all along that you're open to having more competition coming in to the pharmacy business and into the drug selling business. I want to talk to you a little bit about Amazon because, as you know, the word is out that they could get into the, um, drug selling business online. What do you know about that? We shouldn't think of, you know, pharmacy as if we're buying a book, okay. Or, you know, a television that, you know, there is a product component of pharmacy. There's a service component of pharmacy and, you know, and the role that you know, our farms display, you know, across, You know, the country. We have almost 10,000 pharmacies. About 80% of the U. S. Population lives within a few miles of a CVS. And I do believe that you know, that service component recognizes some elements that would be to some degree barriers to entry. And certainly if the Amazon or any other competitors okay, decided to enter that space. You know, I'm confident that, you know, as our business continues to evolve, will continue to be an effective competitors. The people who are familiar with what Amazon might be doing or saying that one of their strategy might be to eliminate the middleman and that would involve companies like a CVS and pass along the savings right to the consumer and also come up with ways that consumers could do comparison shopping when it comes to drugs. How How could CVS compete against something like that? Yeah, I think you CVS Health has created a very unique model in that way operate retail pharmacies. We have a PBM specialty pharmacy. We have many different assets that together they form. You know what we like to refer to as the front door to healthcare. I think the opportunity for us, and it's what we've been working on, what we continue to work on it. How do we connect the dots across all of those different assets to bring innovation and create some type of differentiated experience? So I think that's a little bit what exists within our secret sauce and what will continue to work We talked so much these days about being a disrupter are being disrupted. How do you think Amazon could disrupt the drug selling marketplace? Certainly one of Amazon's core capabilities says their delivery and and and customer experience okay. And, you know, they do a very good job with that, Uh, mail order pharmacy. It already exists in, you know, in the U. S. From CVS as well as you know as well as others. So, you know, I think that, you know, there are opportunities to, you know, effectively compete, and I'm confident that you will be able to do that if they are any other new entries that are the marketplace.