Source: CVS

CVS is going national with its CarePass subscription program, which offers free delivery on prescription medicines, over-the-counter remedies and other products sold by the chain with no minimum order, for an annual fee of $48 or $5 a month.

The program was successfully tested in the Boston, Philadelphia and Tampa markets before the decision was made to roll it out across the country.

“Initial customer response has exceeded our expectations with members utilizing the program’s full benefits and becoming more engaged across all of our digital offerings,” said Kevin Hourican, president, CVS Pharmacy, in a statement.

Results from the pilot, shared by CVS, show that CarePass appeals to consumers across a wide swath of demographic classifications. Twenty percent of those who became CarePass members in the test phase were Millennials. The chain found that those in the program spend 15 to 20 percent more than before they were members.

When the drugstore chain launched the pilot for CarePass last fall, it was widely seen as CVS’ answer to Amazon.com’s PillPack acquisition and a way for it to take back lost sales from the front of the pharmacy.

Amazon has been undercutting CVS’ pricing on comparable private label over-the-counter remedies. CVS’ prices were 20 percent higher than Amazon’s, according to a Jefferies Group report published in June of last year. CarePass subscribers receive a 20 percent discount on CVS-branded products.

Program members will also receive a monthly $10 promotional reward that can be used in the chain’s stores or on cvs.com. Rewards are automatically added to a member’s ExtraCare card at the beginning of each month.

Customer support is also an important element of the program, with CarePass members having 24/7 phone access to speak live with a pharmacist who has access to the prescription histories of those enrolled in the program.

Members are also eligible for free annual sports physicals at local CVS stores that include a MinuteClinic. The chain has said that it is working on offering other perks and services in the future.

DISCUSSION QUESTIONS: Do you expect the results from CVS’ test of CarePass to be replicated on a national level? What impact do you think the launch of CarePass will have on other pharmacy operators when we look back in a couple of years?