CVS Pharmacy Business Model: A Unique Path to Profits and Innovation

CVS Pharmacy App Business Model – What Makes it Unique and Highly Profitable?

CVS Pharmacy App Business Model

On-demand apps are the future and medicine delivery app solutions are one of the lucrative businesses many entrepreneurs with farsightedness aim at. Let us look at the business model of CVS as a company with comprehensive services under its label. Its CVS Pharmacy application validates the future of healthcare with mobile technology. This guide studies how CVS makes revenues with its foolproof business models supported by prudent mobile app strategies and features.

While healthcare is one of the fastest-growing industries all around the world, the United States is a frontrunner in setting new milestones in the sector. Healthcare is one of the sectors that never sees a downside even in the toughest market fall. Hence, there is no doubt that healthcare app ideas could turn into a foolproof business that will stay unaffected by any ups and downs.

The CVS Health Corporation is one such trendsetter in the healthcare industry, and therefore the company sets the epitome of how the online pharmacy business can mint tons of money despite ups and downs in the global market.

In this comprehensive guide, we will dissect the CVS pharmacy app business model and try to learn what makes it a world leader in the drugs and pharma industry. But before that, let us see some of the most impressive stats about the pharma industry and CVS Pharma.

  • The total pharmacy and drug store sales in the US reaches US $324.61 billion, according to Statista
  • According to The Street, CVS sees overall revenue of at least $366 billion in 2024, firmly ahead of the LSEG forecast of around $346 billion
  • CVS Health fetched retail sales of nearly US $106.18 billion in 2022, according to another Statista report
  • The deal value of CVS Health touched US $17.1 million alone in 2023, according to GlobalData
  • CVS Health exceeded 2.5 million members and successfully created 6.3 million new digital pharmacy accounts in the US, according to CVS Health’s annual report

Additionally, CVS Health spread its wings in healthcare benefits, pharmacy services, and also retail industry. Their revenues from healthcare benefits and pharmacy services reached US $91.4 and US $169.2 billion according to the annual report published by the company.

With PWC’s report indicating US $225 billion to the US $275 billion range all over the pharmacy and its subsector, the industry is only going to grow potentially. If you are an entrepreneur and thinking of making a fortune out of the pharmaceutical industry, studying the CVS Pharmacy business model is highly recommended. Learning this model will help you venture into an online pharma delivery business and make your product ahead ofyour peers.

CVS Pharmacy business model

CVS Pharma app is the backbone of the entire business transaction of CVS Health. The mobile app allows customers to manage their prescriptions and order refills while accessingtheir health records and finding nearby pharmacies with ease, right from their mobile phones.

A customized mobile app is a core part of CVS Health’s digital strategy that brings the company enhanced customer engagement, loyalty, and user convenience.

The integrated apps contribute to CVS Health’s profits or revenue in several ways:

  • The app drives traffic to the CVS Pharmacy retail segment, which accounted for US $106.6 billion in revenue for the full year 2022, up from $100.1 billion in 2021.
  • The CVS app supports Caremark, the pharmacy services segment that fetched US $169.2 billion in revenue in 2022 which was up from $153 billion in 2021. The application enables patients to have astounding pharmacy benefits such as comparing drug prices and tracking their spending.
  • The company’s app also complements Aetna, CVS’s healthcare benefits segment that earned US $91.4 billion in revenue in 2022 adding US $10 billion from 2021. The application offers viewing insurance coverage, finding in-network providers, and accessing virtual care.
  • The CVS Pharma application is also anticipated to generate additional revenue from commercial ads, partnerships, and data analytics.

CVS Pharmacy business model canvas

The pillars of CVS Pharmacy business strategies

CVS Pharmacy serves millions of customers every day, and to meet their immense and diversified demands, the company relies on three main strategies: advertising, data collection, and customer loyalty.


CVS Pharmacy uses various channels and platforms to promote its products and services including ads on TV, print media, radio, social media platforms, and in-store displays.

Data collection

CVS Pharmacy also collects and analyzes data from myriad sources like patient’s behavior, transactions, reviews or feedback, loyalty programs, and 3rd party providers. CVS utilizes this data to optimize its inventory, drug pricing, and merchandising tactics.

Customer loyalty

The business model of CVS Pharmacy thrives on building long-term relationships with its users by providing them with high-quality pharmacy products and services at their convenience. The company’s Extra Care program allows customers to earn points for each transaction. They can later redeem them for discounts and rewards.

Why does CVS Pharma invest in mobile app?

CVS Pharma has assurance in business profit by developing a customized mobile app to offer its users convenience, accessibility and personalized content. The CVS Pharma mobile app allows customers to order medicines, refill them, access their health data, schedule doctor’s appointments, and search the nearby pharmacy and more. CVS Pharma increases its customer loyalty and customer base through bespoke mobile solutions. The apps generates great revenue from online sales, ads, and data analysis.

CVS Pharmacy app features that make its business model work

The application of CVS Pharma is perfectly designed and developed to support and execute its business model for profit. A customized mobile app development of CVS Pharma has set a precedent of how one should build an online medicine delivery app solution that reaps enormous benefits through its features and functionalities.

Prescription: The CVS Pharma application supports ePrescription and patients or users can easily manage their present prescriptions and the same from their past.

Doorstep deliveries: Users’ convenience is at the core of the CVS Pharma application that offers easy navigation and simple browsing of the app to order pharmacy products online and doorstep deliveries.

Neat product listing: A lot of business that comes from the online pharmacy store of CVS is due to its neatly listed products. Fair filters and easy visualization of products of all kinds make the app stay on users’ phone’s homepage.

Rewards: Customer loyalty is one of the crucial factors CVS Health never forgets to take into account. Rewards and loyalty programs not only retain old customers but also fetch newer ones.

Customer segmentation

Customer segmentation is a business strategy of CVS Pharma that segregates customers into groups based on their requirements, characteristics, and preferences. CVS tailor its apps to offer personalized and relevant services to this segmented user to increase loyalty and profitability.

  • Retail shoppers: The segment of customers buying products like cosmetics, toiletries, snacks, etc. from CVS stores. The app sends them coupons, discounts, and recommendations based on their purchase history and location.
  • Health enthusiasts: These are customers for wellness and fitness products. The CVS app taps them with services such as vitamin supplements, health trackers, and so on. CVS provides them with health tips, articles, videos, and online consultations.
  • Patients: The core segment of CVS app users, the patients shop for their medical needs including prescriptions, vaccinations, testing, etc. CVS walks the extra mile to provide medications, appointments, records, and insurance.

Marketing strategies

CVS pharmacy app proves to be a 360-degree digital platform with astounding marketing strategies to ensure a steady flow of revenue for the company. One of the marketing strategies for the CVS pharmacy app is to target the healthcare niche. The app focuses on delivering solutions that address particular health concerns and goals of its customers. Partnering with Aetna it offers integrated services and benefits to its members.

Another marketing strategy for the CVS pharmacy app is to use custom-base recommendations. The app uses data and analytics to understand the preferences and behaviors of its customers to recommend products, services, and offers relevant to each customer. The app alsofosters community engagement by encouraging customers to share their feedback, reviews, and stories with other users. lastly, the marketing strategy for the CVS pharmacy app is to leverage social media through its strong presence on Facebook, X, Instagram, and YouTube. The app uses them all to promote its features, benefits, and offers.


One of the key aspects of the CVS pharmacy app business model is the strategic partnerships with various stakeholders in the healthcare industry. These partnerships enable CVS to offer a comprehensive and convenient service to its customers, while also creating value for its partners.

Some of the partnerships that CVS leverages for its business model include:


CVS works closely with pharmaceutical manufacturers and distributors to strengthen its supply chain for medicines and vaccines. The company also negotiates discounts and rebates with pharma companies tobring down the drug costs for its customers while increasing its profit margin.

Insurance providers

Another important partner that plays a vital role in CVS’s pharmacy business model is insurance companies to work on myriad health plans for providing pharmacy benefit management (PBM) services to manage drug formularies, process claims, and administer specialty pharmacy programs.

Tech partners

No business can thrive without technology help. Sensing the future of healthcare with mobile technology, CVS banks on the latest technology to enhance customer experience and operational efficiency. The pharma giant collaborates with tech companies like Google, Apple, and Microsoft to integrate its appspowered by AI, ML, cloud computing, and data analytics.

Retail partners

The pharma giant CVS operates close to ten thousand retail locations throughout the United States serving as primary touchpoints for its customers. The company also partners with other retail giants like as Target and Walmart to offer various pharmacy services at their stores.

How does CVS Pharmacy make money?

CVS operates in four major segments: retail, pharmacy services, specialty pharmacy, and healthcare innovation. While every segment has a different revenue stream, here are the value propositionsfor each of stream:

Retail operations: This includes sales of prescription drugs, OTC (over-the-counter) medications, health/wellness/beauty products, and general merchandise through CVS Pharmacy and Longs Drugs stores. The CVS business model fetches revenue for this segment through the mark-up on the products sold plus the charges for services such as MinuteClinic visits, immunizations, and health screenings.

Pharmacy services: This is another segment of CVS providing pharmacy benefit management (PBM) services to employers, health plans, and government entities. The company generates revenue streams through fees for managing drug formularies, negotiations and rebates with pharma companies, and claim processing.

Specialty pharmacy: This is a niche segment of CVSoffering specialty drugs and related services to patients diagnosed with complex and chronic ailments like cancer, hepatitis C, multiple sclerosis, and rheumatoid arthritis. The revenue model for this segment isfrom the markup on the special drugs sold plus charges for any clinical support, infusion services, and patient care.

Healthcare innovation: This includes the development and commercialization of anything that leverages CVS Health’s technology aspects, data, and analytics. CVS’s business model fetches revenues primarily from the professional fees applied to providing digital health solutions like remote monitoring through telehealth, chronic disease management, and partnerships with other healthcare setups like corporate hospitals, healthcare companies, and potential insurers.

The cost structure of CVS

The cost structure of CVS Health can be analyzed by looking at four main categories: cost of sales, general and admin, research and development, and marketing. Cost of sales means the expenses of purchasing and distributing CVS Health products and services like scheduled drugs, OTC items, and health care services.

The general and admin costs are the expenses of running the business operations which include staff salaries, office and warehouse rent, utilities, and legal fees. CVS also spends significant amounts on research and development for its new products and services including clinical trials, licenses, and patents. Lastly, the cost structure of CVS includes its expenses for marketing such as advertising, loyalty programs, and sponsorships.

Ready to apply the CVS Pharmacy app business model to your business?

This short guide is intended to educate entrepreneurs who want to venture into the lucrative business of online pharma stores boosted with mobile app solutions. Prismetric is a pioneer healthcare app development company and we can customize solutions specific to the professional requirements of healthcare setups and healthcare providers.

You can have innovative healthcare app ideas and Prismetric has a perfect solution to turn your ideation into a tangible product. As a responsible and objective-oriented company, we are aware of medical standards so whether you want a mobile app with HIPAA compliance or want a secure encrypted EHR solution, we are the choice.

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