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CVS forecasts 80% drop in COVID vaccine sales for 2022

CVS on Wednesday said it expected a 70% to 80% drop in the number of COVID-19 vaccines its drugstores will administer this year and said 2022 profit would be driven by its health insurance and pharmacy benefit management businesses. Shares of the company fell more than 4% in early trading after the company left its 2022 earnings forecast unchanged despite beating profit expectations in the fourth quarter. CVS made the comments during a conference call to discuss fourth-quarter results, which exceeded Wall Street estimates for profit and sales. The company, which operates one of the largest US drugstore chains, manages pharmacy benefits for employers and health plans and owns the Aetna health insurer, also forecast a 40% to 50% fall in COVID-19 testing at its stores. It said it expects “modest full-year volume growth” in over-the-counter test kits. CVS said it administered COVID-19 vaccine booster doses during the fourth quarter that it had previously expected to provide in 2022, helping drive a near 13% increase in sales at its retail stores. That was also a factor in not raising the 2022 forecast, it said. While some countries such as Israel have begun giving out fourth vaccine doses, CVS is not counting on booster shots boosting its business. “Our outlook does not assume any impact from the administration of a fourth COVID-19 booster,” Chief Financial Officer Shawn Guertin said on the call. “As such, we expect the contribution of COVID-19 vaccines to be more heavily weighted to the first half of the year.” Demand for COVID-19 vaccines at CVS stores shot up to more than 20 million during the fourth quarter from around 11 million in the preceding quarter as the U.S. booster shot campaign gathered steam. The company administered over 8 million COVID-19 tests, largely similar to what it recorded in the third quarter. CVS’ sales and profit beat in the quarter was “more pronounced, due to stale and overly conservative estimates that didn’t align with guidance,” said Baird analyst Eric Coldwell. Excluding items, CVS earned $1.98 per share, beating analysts’ estimates by 5 cents, according to Refinitiv data. Sales in its pharmacy services unit, which includes the pharmacy benefit management business, rose to $39.34 billion in the quarter from $36.36 billion. Total revenue rose 10% to $76.60 billion, topping estimates of $75.67 billion.

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