When you pick up your prescriptions or pain meds, do you visit a Target pharmacy? If so, you’ll soon see a different yet familiar company’s name above your pharmacist’s window: CVS.
CVS Health continues to forge its way into America’s healthcare system and add even more touch points with consumers after agreeing to buy 1,600 drugstores from Target for about $1.9 billion. The deal affects individuals who currently use Target’s pharmacies in 47 states. Target Clinics will also be rebranded as MinuteClinic® facilities (80 in all, with another 20 planned).
CVS Health’s Focus in Retail and Health
How ingrained is CVS in the the U.S. retail and health care industries? Consider these numbers. CVS is the:
#1 dispenser of prescription drugs
#1 operator of retail clinics (MinuteClinic)
#2 drugstore chain (behind Walgreens)
#2 pharmacy benefits manager (behind Express Scripts)
Beyond traditional pharmacy services and retail consumer products, CVS made a decisive push into the healthcare world between 2000-2002 when it launched its MinuteClinic retail clinics. More recently, the company has shown its brand dedication to health by renaming itself from CVS Caremark and announcing it would stop selling tobacco products last September.
Now CVS will have even greater exposure among consumers reaping foot traffic from Target patrons.
How Does Target Benefit?
Meanwhile, outside of financial incentives of course, Target will ideally benefit from the ability to push its wellness-related products, including over-the-counter health and beauty merchandise, wearables, fitness apparel and food offerings.
According to Target’s CEo, Brian Cornell, the retailer will also focus efforts on the expansion of its food products. Target aims to provide natural, organic, and gluten-free products for consumers, along the lines of the Whole Foods-approach. Here’s an interesting round-up of a few other reasons why Target sold the pharmacy, including lack of profitability and the complexity of the healthcare industry.
Watch Cornell talk more about the decision, millenials, and Target’s brand.
(You can also see additional video interviews with Cornell.)
Retail Clinic Outlook
CVS was already the far-and-away leader in the retail clinic space. This deal helps them not only add more retail clinics, but it also eliminates one of their competitors.
With other major brands like Walgreens, RiteAid, and Wal-Mart also competing in the retail medicine space, it will be interesting to see if smaller competitors in supermarkets (like Little Clinic) and other retail areas continue to launch or expand.
View some additional resources on the CVS pharmacy purchase here: