CVS Health (CVS) Launches Clinical Trial Services Business
CVS Health Corporation CVS recently announced its Clinical Trial Services business to assess the safety and efficacy of latest investigational drugs and medical devices. This development remains part of the company’s CVS Pharmacy arm.
This business is said to integrate technology and clinical trial expertise across CVS Health enterprise to improve study participation rates, participant retention and accessibility across communities; introduce convenient trial sites and meet other study participation requirements.
Objective of the New Business
The Clinical Trial Services unit is intended for formulating innovative approaches to research and generation of real-world evidence in partnership with key stakeholders in the biopharmaceutical industry and clinical trial ecosystem.
The new business will be focused on leveraging patient recruitment through application of analytics, national reach and local community connections. The business will offer a variety of options that ensure flexible delivery of clinical trials at CVS locations, at home or virtually. It will also undertake studies that evaluate the impact of novel devices and therapeutics in real-world settings.
To aid clinical trials for investigational COVID-19 vaccines and treatments, CVS Health has collaborated with the pharmaceutical industry.
Strategic Significance
For investors’ note, clinical trials play a pivotal role in evaluating the safety and efficacy of investigational new drugs and devices, making them available to the niche market. Under the present healthcare scenario, the importance of clinical trial industry is growing leaps and bounds.
However, this industry is facing severe snag related to trial participation. Per data published in Patient Recruitment and Retention Services Market, 2019-2030, less than 4% of the U.S. population participates in clinical studies. Added to this, 80% of studies fail to meet participant enrollment deadlines. Also, an average of 30% participants drops out later.
The new clinical trial business leveraging on CVS Health’s vast nation-wide network and digital capabilities is expected to approach a vast population base about the upcoming trials. This will thereby have high chances to improve the clinical trial participation scenario.
Industry Prospects
Per a report published in Grand View Research, the global clinical trials market is expected to see a CAGR of 5.7% from 2021 to 2028. Increasing prevalence of chronic disease, growing need for personalized medicines and orphan drugs, advanced technologies and high demand for clinical trials in developing countries are key factors fueling growth in this market.
Given the market potential, efforts to strengthen foothold in the global clinical trials market seem strategic and well-timed.
Latest Developments
CVS Health has made significant progress in the expansion of vaccine and diagnostics business related to COVID-19. Per its first quarter 2021 earnings call, as a milestone achievement, the company helped fulfill the President’s 100-day goal of administering 200 million vaccines in the United States.
In May 2021, following the FDA’s Emergency Use Authorization of the Pfizer-BioNTech vaccine for adolescents aged 12 to 15, the company announced the availability of vaccine appointments at more than 5,600 CVS Pharmacy locations for the said age group.
In April 2021, as part of CVS Health's commitment to providing consumers with access to comprehensive COVID-19 testing services, CVS Pharmacy, announced the availability of three FDA approved over-the-counter COVID-19 testing options at stores and online.
Share Price Performance
The stock has underperformed its industry over the past year. It has gained 41.6% versus the industry’s 45.1% growth.
Zacks Rank and Key Picks
Currently, CVS Health carries a Zacks Rank #3 (Hold).
A few better-ranked stocks from the broader medical space include PetIQ, Inc. PETQ, Computer Programs and Systems, Inc. CPSI, and Amedisys, Inc. AMED.
PetIQ, currently sporting a Zacks Rank #1 (Strong Buy), has a long-term earnings growth rate of 25.00%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Computer Programs and Systems, which carries a Zacks Rank #1, has a long-term earnings growth rate of 14.00%.
Amedisys, which carries a Zacks Rank # 2 (Buy), has a long-term earnings growth rate of 12.00%.
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