CVS Caremark Health Corporation: Company Overview

CVS Caremark Health Corporation Analysis

Stacia Rivers

Southern New Hampshire University

Course number 3112979: Microeconomics

14 December 2014

Abstract

The CVS Caremark Health Corporation is an American based health care and retail company.

Since opening they have become powerhouses in growth by acquisitioning major and minor chains of retail pharmacy based stores. A huge part of their business model is overall improving the healthcare and pharmacy experience everywhere. Along with its recent name change to CVS Health the firm has also quit the distribution and sells of tobacco products as well as reimaged their brand. In the recent years supply and demand conditions has not had a detrimental impact on the company due to

provides range from “...pharmacy benefit management (PBM), mail order and specialty pharmacy division, CVS Caremark® Pharmacy Services; our more than 7,600 CVS/pharmacy® and Drogaria Onofre® retail stores; our retail-based health clinic subsidiary, MinuteClinic®; and our online retail pharmacies, CVS.com® and Onofre.com.”(CVS 2013 Annual Report, 24) The companies is not only integral in reinventing innovative pharmacy approaches they are fully committed to social responsibility by providing disaster relief efforts, support for veterans, scholarships and grants, a health foundation, employee relief fund program, partnerships with many health foundations, and of many other reducing environmental impacts. “CVS Caremark Corporation...integrated pharmacy services model enhances our ability to offer plan members and consumers expanded choice, greater access and more personalized services to help them on their path to better health.”(CVS 2013 Annual Report, 24) A huge part of their business model is overall improving the healthcare and pharmacy experience everywhere. As time change, so has CVS

In relation to their pharmacy and health services the firm is inelastic. Due to recent announcements and implementations this year however there is no longer carry tobacco products. Price elasticity of demand is described as the consumer “Responsiveness of changes in quantity demanded to a change in price of the product. It is measured by the formula: percentage change in quantity demanded/percentage change in price…Goods with a price elasticity of less than 1 are said to be inelastic. Goods with a price elasticity greater than 1 are said to be elastic.”(Helicon, 2014) Regardless of the declining utilization of cigarettes they are inelastic. Regardless of how high the cost is, consumers that smoke will still consume them because it is not easy to break the nicotine addition. As seen in figure 1, although demand and sells were decreasing for cigarettes it was an increase for the substitute e-cigarettes. CVS Health will be losing estimated over $2 billion dollars however will not affect them much considering they are a $126.8 billion dollar company. As of now the price elasticity of demand for retail prescriptions remain inelastic because of the need of