CVS Says Covid-19 Test Delays Are Abating -- 2nd Update

By Sharon Terlep 

CVS Health Corp. said delays getting Covid-19 test results to customers are abating after backlogs led to extended wait-times that threatened to hamper efforts to contain the coronavirus pandemic.

The drugstore chain, the biggest retail chain conducting Covid-19 tests in the U.S., said it temporarily reduced the amount of new tests it administered while adding additional labs to process backlogged results.

For much of July, people getting Covid-19 tests at CVS faced weekslong wait times for results that were supposed to be available within days. CVS has said delays at laboratories CVS contracts with to process results caused the slowdown.

Prolonged wait times for test results can complicate efforts to find and isolate people with whom an infected individual had contact.

"We've seen dramatic improvement," CVS Chief Executive Larry Merlo said Wednesday in a call with analysts. He said one of the labs processing Covid-19 tests results for CVS is still experiencing delays.

CVS is providing Covid-19 tests at 1,800 locations, Mr. Merlo said. Amid delays, the company cut testing volumes by 25%, he said. The company is working to ramp up testing as the nation's diagnostic capacity remains well short of what health experts recommend to contain the virus.

As it works to further ramp up Covid testing, CVS is readying for higher-than-normal demand for flu vaccines this season. Vaccinating against the flu will have heightened importance, Mr. Merlo said, because flu and Covid share similar symptoms.

CVS on Wednesday also disclosed financial results for the latest quarter, saying that profits in its insurance business were bolstered as Americans held off on elective procedures and regular health care amid the pandemic.

Shares rose 0.4% in morning trading.

CVS, which owns insurance giant Aetna, joins other insurers realizing savings from skipped elective procedures and reduced visits to clinics and emergency rooms. Those savings have well eclipsed insurers' payouts for coronavirus care.

At the same time, CVS's store sales fell 4.5% and the number of prescriptions filled in the quarter fell 1.1%, as shelter-in-place orders kept people home.

The company said customers are returning to more normal health-care routines now and that it expects more people will use their insurance for health care in the second half of the year.

The pharmacy chain said it now expects earnings of $5.59 to $5.72 a share, or $7.14 to $7.27 a share on an adjusted basis. It previously expected earnings of $5.47 to $5.60 a share, or $7.04 to $7.17 a share on an adjusted basis.

CVS posted second-quarter profit of $2.98 billion, or $2.26 a share, compared with $1.94 billion, or $1.49 a share, in the same period last year. Adjusted earnings were $2.64 a share, ahead of the $1.91 a share analysts polled by FactSet had expected.

The Woonsocket, R.I.-based company reported sales of $65.34 billion.

Sales in the company's health-care-benefits segment, which includes Aetna, rose 6.1% to $18.47 billion. It reported a medical-loss ratio, or the share of premiums the insurer pays out in claims, of 70.3%.

Sales in the company's segment that fulfills medication prescriptions and sells general products rose 1% to $21.66 billion. Pharmacy-services segment sales rose slightly to $34.89 billion, partially offset by lower provider visits during the quarter.

--Dave Sebastian contributed to this article.

Write to Sharon Terlep at [e-mail]

(END) Dow Jones Newswires

August 05, 2020 10:58 ET (14:58 GMT)

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