James HesterReuters – CVS Health, which is said to be in talks to buy health insurer Aetna, posted a bigger-than-expected third-quarter profit as it processed more claims in its pharmacy benefits management business.
Revenue in the business - its biggest - rose 8.1% to $32.9bn in quarter ended September 30, also driven by an increase in claims in higher-margin specialty pharmacy business.
The specialty pharmacy service provides expensive drugs to people with chronic conditions such as rheumatoid arthritis.
CVS is said to have made an offer to buy No. 3 US health insurer Aetna for more than $66bn in a deal that would give the drugstore chain more leverage in price negotiations with drug makers. But it would also subject the company to more antitrust scrutiny.
Net income attributable to CVS fell to $1.29bn, or $1.26 per share, in the quarter ended September 30, from $1.54bn, or $1.43 per share, a year earlier.
Coronavirus affects markets
The drop in net income was mainly due to a loss of contracts to fill millions of retail prescriptions for customers of Tricare, a US Department of Defence health care programme, and pharmacy benefits manager Prime Therapeutics.
Excluding items, CVS earned a profit of $1.50 per share, beating he average analyst estimate of $1.48, according to Thomson Reuters I/B/E/S.
Revenue rose 3.5% to $46.18bn, largely in line with the average analyst estimate of $46.17bn.
The company’s shares were slightly higher at $69.60 in premarket trading.
