CVS Health raises guidance on strength of pharmacy

Citing strong performance in its pharmacy business, CVS Health raised its 2025 guidance in its Q2 financial results, with revenues hitting $98.9 billion during the quarter, an 8.4% increase from last year.

Net income landed at $1 billion in Q2. The healthcare company now projects earnings per share of $6.30 to $6.40, up from the previous forecast of $6.00 to $6.20. CVS also raised guidance for cash flow from operations to at least $7.5 billion, up from the previous projection of about $7 billion.

CVS Health President and CEO David Joyner said the company performed well because it offers a "connected, simpler healthcare experience."

"For the 185 million people we serve, we deliver better access, greater affordability and aligned advocacy," Joyner said. "Our strong performance demonstrates the continued focus we have on operational and financial improvement across our businesses, led by a significant and durable recovery at Aetna, strong retention at CVS Caremark, and growth and momentum at CVS Pharmacy."

WHAT'S THE IMPACT

Aetna saw its medical benefits ratio increase during the quarter, just months after CVS announced that Aetna would be exiting Affordable Care Act individual markets in 2026 due to struggling performance.

Aetna exited the ACA market before – in 2018, when it joined other insurers in leaving or downsizing its footprint, as premiums rose and insurers lost money. In 2021, Aetna reentered the market, with former CEO Karen Lynch saying at the time that the market had stabilized and resolved earlier "structural issues." Yet Aetna has struggled since its reintroduction into the ACA exchange and posted an adjusted operating income loss of $924 million in 2024. 

For Q2, Aetna's medical benefit ratio increased to 89.9% from 89.6% in Q2 2024. The MBR after the first six months of the year landed at 88.6%, down from 90% during the same period last year.

There were 26.7 million members in Aetna insurance plans as of June 30. Medical membership declined by 358,000 members. 

Revenues for CVS Health's health services segment saw revenues grow 10.2% to $46 billion, while revenue for the pharmacy and consumer wellness segment grew 12.5%, to $33.5 billion.

THE LARGER TREND

In May, attorneys general from Massachusetts, Connecticut, Oklahoma and Indiana filed a lawsuit against CVS Health claiming that it submitted "false and fraudulent claims" to state Medicaid programs. That lawsuit is ongoing.

The AGs say CVS Health charged these programs higher prices than they offered to the public for the same drugs. 

Specifically, the complaint alleges that CVS offered lower drug prices to cash-paying customers through a discount program administered by a company called ScriptSave but did not report the discounted rates to state Medicaid programs. 

CVS, the AGs allege, hasn't submitted its customary prices available to other payers on prescription drug claims to Medicaid since 2016, resulting in state Medicaid programs overpaying CVS when compared with other health plans, the complaint said.