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November 19, 2021

CVS Shifting Gears to Accelerate Strategy

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In what it termed a move to accelerate its health strategy, CVS Health announced that it would develop new retail concepts, close 900 stores and replace Neela Montgomery, evp and president of CVS Retail/Pharmacy.

Prem Shah will take the newly created role of chief pharmacy officer and become co-president of the company’s retail business with Michelle Peluso, a former IBM executive who joined CVS in 2021 as evp and chief customer officer. Peluso will supervise front-store strategy and operations. Shah joined CVS Health in 2013 after working for ICORE, a Magellan Health Services company, and has been evp/specialty pharmacy and product innovation.

“Prem and Michelle are ideally suited for their new roles and will be instrumental to CVS Health as we continue to execute against our strategy of delivering an integrated health care experience centered around the consumer,” said Karen Lynch, president and CEO of CVS Health, in announcing the changes.

As part of a company strategic review of its retail business, CVS Health will create new retail formats to drive higher engagement with consumers.

Three distinct models will act as community health destinations:

  • Websites dedicated to offering primary care services
  • An enhanced version of the HealthHUB format with products and services designed for everyday health and wellness needs
  • Traditional CVS Pharmacy stores providing prescription services and health, wellness, personal care and other convenient retail offerings.

At the same time, CVS Health will reduce store density in certain geographies and close about 300 stores a year for the next three years.

“Our retail stores are fundamental to our strategy and who we are as a company,” Lynch said. “We remain focused on the competitive advantage provided by our presence in thousands of communities across the country, which complements our rapidly expanding digital presence.”

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