retail news in context, analysis with attitude

Good piece in Business Week about how CVS/Caremark CEO Tom Ryan has as his goal “to help transform America's expensive and often ineffective health-care system. Seeking to take advantage of President Barack Obama's commitment to health-care reform, Ryan wants to use CVS's vast prescription database and burgeoning network of in-store clinics to treat patients with chronic diseases and help keep them out of the hospital, where most medical costs are incurred … Ryan believes CVS could help solve this problem and, in the process, boost its own bottom line.

“As a pharmacy benefit management company, the Caremark unit handles drug coverage for large employers and health plans, negotiating discounts with drugmakers. It owns a treasure trove of prescription drug data, as does CVS. The merged company is thus an info tech Goliath, filling or managing more than a billion prescriptions a year. It can use that information to figure out which customers require a gentle reminder to come in for a refill. As a result, customers would buy more drugs, make ancillary purchases in the store, and maybe even visit the clinic. Ryan's challenge is convincing CVS customers that such refill reminders aren't just marketing tactics. He is encouraged that the Obama Administration recognizes the importance of drug compliance and will support private sector initiatives. As debates over health-care reform heat up this spring, Ryan will argue that his aggressive strategies also make good medical and economic sense.”

KC's View:
This sort of ambitious, broad view makes a lot of sense right now, I think, because there seems to be receptiveness to alternative solutions to various problems. Retailers in this business who can address things like the health care crisis and the obesity crisis may find themselves in a very good position when we finally dig ourselves out of the economic hole we’re in.