Lynch: CVS confident about strategy as Amazon aims to muscle in on its turf

CVS Health CEO Karen Lynch said the company isn't intimidated by tech giants like Amazon trying to bite into its market share.

Lynch, speaking at the Wall Street Journal Health Forum on Tuesday, said CVS already has an established relationship with 100 million customers as a community pharmacy and insurer and has invested heavily in building capabilities like home pharmacy delivery and digital health.

CVS is embedded in many communities and is a healthcare brand patients are already comfortable with, she said.

Karen Lynch
Karen Lynch (CVS Health)

"I firmly believe we have a strong and solid strategy," she said. "I’m very focused on our strategy and making sure that we have affordable access to care and that we’re improving overall medical costs."

Amazon launched its virtual health pilot, Amazon Care, about 18 months ago and announced this week that it's planning to expand the program to all of its employees by the summer and begin offering it to other employers as well.

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The retailer has also launched Amazon Pharmacy, which allows patients to purchase medications and have them shipped to their homes. Analysts said the move positions Amazon as a major competitor to CVS, Walgreens and other established brands in the pharmacy space.

Lynch also touched on another market in which competition is heating up during the event: the Affordable Care Act's (ACA's) exchanges. 

She announced on the company's earnings call last month that Aetna is aiming to return to the exchanges after four years on Jan. 1, 2022. Stabilization in the markets has lured previously hesitant insurers back or enticed them to expand their offerings.

The Aetna team determined "it was important for us" to be in a market that reaches 11 million to 15 million people, Lynch said.

Lynch said Aetna expects to be competitive immediately as it can now harness the combined resources of the insurer and CVS Health, including a potential joint-branded product that takes advantage of CVS' HealthHub concept stores. Aetna unveiled a similar plan design in August last year for employers.

She said the insurer expects to file officially in the April-May window, which will further flesh out its ACA exchange plans.