Retail News Breaks Archives
Foulkes takes on new challenge at CVS
April 28th, 2014
WOONSOCKET, R.I. – For most executives, being chosen to head one of the world’s great drug chains would constitute an end point, the culmination of a notable career in mass market retailing. For Helena Foulkes, who became president of CVS/pharmacy in January after distinguishing herself in a variety of roles during 22 years with the company, it represents a new beginning.
“I’ve been fortunate to be part of an organization that’s growing and innovating the way we are,” she says of CVS Caremark Corp., which during her career has evolved from a regional drug chain to a diversified health care services provider that, in addition to the retail component, includes the second-biggest pharmacy benefits manager in the United States and the leading operator of in-store retail medical clinics. (The company’s annual revenue of $127 billion is split evenly between the retail and PBM sides of the business.) “Just at that point where we start to think we’ve mastered something, the world changes for us.
“I’ve had the opportunity to work in many different areas of the company,” adds Foulkes, whose assignments have included chief health care strategy and marketing officer for the corporation, senior vice president of health services, and architect of CVS/pharmacy’s ExtraCare loyalty program. “Having moved around so much, I’m comfortable being on a learning curve. It’s exciting to be in a new environment — whether it’s a new role or new business challenge that we’re facing. The environment we operate in increasingly requires us to learn quickly, adapt and respond.”
The immediate challenge for Foulkes and her colleagues is adapting to the transformation of the nation’s health care system. Spurred in large part by the Affordable Care Act, which is still expected to eventually expand the ranks of the insured by some 25 million people, the way health care services are provided and paid for is changing significantly, opening the door for community pharmacies to do more.
“The ACA presents an opportunity for CVS Caremark to serve clients and consumers in a very different way,” she notes. “Our integrated model is unique, giving us the ability to serve both clients and consumers who are navigating the health care system. From a client perspective, we’re spending a lot of time interacting with health plans that are competing on the insurance exchanges and helping them with new products and services that will make them more attractive.
“From a consumer perspective, we’ve done a lot in the last year and will continue to do so around educating people about their options and making sure they have a pharmacist they can turn to for help finding their way and knowing where to go to learn more.”
Developing synergies between the different aspects of the business, a process in which Foulkes has been deeply involved, provides CVS Caremark with a competitive edge. Such programs as Maintenance Choice, which gives patients the option of picking up medications for chronic conditions at their neighborhood CVS/pharmacy or having them delivered to their home, while at the same time saving money, and Pharmacy Advisor, which identifies patients who can benefit most from interaction with pharmacists in an effort to improve outcomes and lower costs, link store-based capabilities with those of the PBM, making the whole greater than the sum of its parts.
“We see a big opportunity to serve all of our members in a more complete way. Certainly if they use CVS Caremark as a PBM, there’s a richness of the experience that we can create. That is very much a part of our strategy,” says Foulkes. “But we serve 5 million people a day in our stores, so we also have to think about how to bring some of those service offerings to everyone who walks in the door.”
"We’re becoming more health care-oriented. When the consumer defines health care, she’s thinking both about the pharmacy and about health and beauty care and the other things we offer."
The latest innovation is Specialty Connect. Now being rolled out, the program is a response to the shift in the pharmaceutical industry toward greater dependence on large-molecule technology for breakthrough products and the challenges the resulting treatments create for patients, providers and payers.
“Specialty Connect is really about designing an experience for both the consumer and the doctor to make it easy for the patient to get the prescription filled in whatever fashion she prefers,” Foulkes explains. “Specialty medications are both really expensive and really complicated. When people are newly diagnosed with a serious condition, they often don’t know how their plan design works and where they will be able to fill these medicines. What we want to do is take that question and doubt off the table for the consumer and for the doctor, and ultimately get her on the right medication as quickly and easily as we can.
“Through our Specialty Connect program, a patient can bring that prescription to any one of our 7,600 stores. There’s power in a face-to-face connection with our pharmacists. Then we’re going to use the specialty back-end resources that we have — including our clinical, financial and formulary capabilities — to fill those prescriptions centrally and give the consumer the choice of whether she wants to come back to the store to pick them up or have then shipped directly to her home.
“Our pharmacists are very engaged in Specialty Connect because they feel proud about the service that they are delivering for consumers and for physicians. The program alleviates a pain point that up to now has been very real for them.”
Another potential opportunity to enhance the role CVS/pharmacy plays was created by the company’s $2.1 billion acquisition of Coram LLC, a provider of infused therapies and enteral nutrition, last November.
“Today Coram is mostly serving consumers in the home,” says Foulkes. “We see an opportunity to do even more integration of Coram with the rest of our business to serve our hospital clients more effectively, to help them as they’re transitioning patients from the hospital to the home for infusion. There’s certainly a possibility at some point that infusion services will also be integrated with the in-store environment, and we are working through that.”
CVS/pharmacy is positioning itself first and foremost as a health care provider (a stance that will be reinforced by the rapid expansion of the number of MinuteClinics in operation from the current 800 to 1,500 by 2017). For Foulkes, that vision encompasses the entire store.
“We’re becoming more health care-oriented,” she notes. “When the consumer defines health care, she’s thinking both about the pharmacy and about health and beauty care and the other things we offer. The announcement about our exit from tobacco sales [see related story] is a critical part of building our reputation with consumers and clients as a health care company they can respect and trust. It has really allowed us to start to think differently about what more we can do throughout the store environment to be a meaningful health care partner to all the consumers that we’re serving.”
The physical embodiment of CVS/pharmacy is beginning to reflect that strategy in new ways. The retailer is currently experimenting with numerous format changes and store clusters, the most developed and widely deployed of which is designed for urban shoppers and places special emphasis on food and grocery offerings.
“We’re in a state of constant evolution,” says Foulkes. “We have different formats that we are trying in different markets.
“Ultimately we’re very much focused on health and beauty as an extension of the pharmacy experience, and the question is — How do we do it in a way that delights the consumer and is the right thing from a business perspective? We’ve done a lot of work around this during the last year and we’ll continue to tweak and refine our in-store experience, but at this moment on there are no plans to launch a brand-new layout across the entire chain.”
Foulkes is quick to acknowledge the contributions that consumer products manufacturers make as CVS/pharmacy works to hone its business.
“We want to be a very important partner for the national brands, because they help drive traffic to our stores,” she says. “Great suppliers help all of us to be really smart. I learn something every time I meet with them. I want them to push us, to challenge us. I especially appreciate suppliers who are bringing ideas not just about the product that they’re selling, but also about the consumer or broader trends or other things we should be looking at.”
Whatever changes Foulkes and her team make are intended to empower the retailer to do a better job serving the consumer in an increasingly individualized way. Advanced technology has been harnessed to pinpoint the needs of pharmacy patients, glean insights from ExtraCare that shape the merchandise mix, and personalize promotional offers in the digital myWeekly Ad circular. At the same time, the fundamentals that have always sustained CVS/pharmacy are being reemphasized.
“One of the things that I’m passionate about is a mind-set that I’ve introduced in the company called Think Customer,” Foulkes says. “This means always putting ourselves in the customer’s shoes and thinking about her overall experience.
“At some level, that would seem obvious because we’re serving customers every day, but in the retail environment we can lose sight of that fact. Because there’s so much to execute with excellence, we sometimes forget to step back and ask, ‘How do I design something or deliver a service that would really delight the consumer?’
“It happens every day in our stores, but what we’re trying to do is celebrate it more when we see it. We’ve really thought hard about the consumer experience, and we’re challenging ourselves and each other to make sure that we do even more of that. It can be as simple as greeting, offering to help and thanking every customer; to ensuring every CVS store has the right number of colleagues at the right time to support the best service experience for customers; to putting the customer at the center of any new service or initiative we are designing.”