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CVS pilots new membership program in the face of increased competition from the likes of Amazon

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CVS Health is the largest retail pharmacy in the nation, one of the largest PBMs and, if all goes according to plan, will add major insurer Aetna under its umbrella by the end of the year.

Observers have pointed to these moves as serving to shore up existing business lines as the company sees Amazon’s march into healthcare on the horizon, but a recent move from CVS seems cribbed from the e-commerce giant’s playbook.

The pharmacy company has launched a pilot membership program in the Boston area called CarePass that offers free one or two day delivery on most prescription medications and purchases, a discount on items under the CVS Health brand, access to a 24/7 pharmacist hotline and a $10 monthly store credit.

CarePass itself costs $5 a month or $48 for an annual membership. Compare this to Amazon Prime, which costs $119 a year, but offers additional perks on top of free two-day shipping including exclusive deals and access to the company’s music and video streaming services.

Amazon has taken increasing steps to broach the pharmacy industry including  the acquisition of pharmacy startup Pill Pack earlier this year, which gave the company a ready made pathway to legally ship medication nationwide.

In response to this business threat, the pharmaceutical industry has seen mega-mergers and consolidation exemplified by CVS Health’s $69 billion bid to buy health insurer Aetna.

Healthcare experts have positioned this move as a way to insulate the company’s customer base from the draw of new entrants like Amazon and additionally growing its own front end over-the-counter pharmacy business by driving more patients into the company’s retail spaces.

As the trend for consumerization and on-demand healthcare services continue to increase, CVS Health’s walk-in MinuteClinics also potentially provide one area of growth for CarePass benefits.

Currently CarePass is being offered at more than 350 CVS locations across the Boston area. In order to be eligible for CarePass benefits, members must already have signed up for the company’s customer loyalty ExtraCare Rewards Card.

“We are committed to designing and testing innovative programs that meet our customers’ health needs whenever, wherever and however they want,”CVS Pharmacy President Kevin Hourican said in a statement.

“The CarePass pilot program in Boston offers our customers an additional level of benefits and services that make it easy to save time, save money and receive access to on-demand pharmacy care.”

Photo: alvarez, Getty Images 

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