Leading health solutions company CVS Health recently disclosed that its clinical trial business will shut down just two years after its initiation in May 2021. The company will gradually wind down its CVS Health Clinical Trial Services unit with full exit by December 31, 2024. According to the company, it is an attempt to focus on its core businesses which include retail pharmacy, health insurance, prescription drug coverage and health care and wellness.
“We continually evaluate our portfolio of assets to ensure they are aligned with our long-term strategic priorities,” said Mike DeAngelis, executive director of CVS Corporate Communications, in a statement.
“We’ll work with our trial sponsors to ensure a smooth transition, as well as continuity of care and minimal disruption for patients. In parallel, we’re working to support impacted colleagues, and will provide career transition support for those unable to find another role within CVS Health,” added DeAngelis.
On its website, CVS is still actively recruiting for five clinical trials in areas such as narcolepsy, rheumatoid arthritis and kidney disease.
The news about the closure was circulated after several publications independently confirmed clinical trial unit closure with CVS, but the company has yet to make an official announcement.
Furthermore, CVS Health’s first quarter 2023 report highlights the realignment of its segments to correspond with changes made to its operating model; however, the financial aspect of the clinical trials unit is yet to come out, which might shed light on the profitability of the business.
Factors Behind the CVS Health Clinical Trial Services Closure
Speculations are rife in the industry for reasons behind the closure of CVS Health Clinical Trial Services. Some experts think this dramatic decision could be from a combination of factors such as strategic realignment, financial performance and competition. CVS is known for its retail pharmacies, and perhaps the clinical trials unit was not a strategic fit for the company.
When CVS Health started its clinical trial services in the spring of 2021, it aimed to boost clinical trial enrollment, retention and participant diversity with three initiatives: patient recruitment, real-world data collection and decentralized/digital technology.
The complexity of decentralized trials and the difference between CVS Health’s clinical trial services and its core businesses are being considered as the major contributors behind the move to close the Clinical Trial Services unit. CVS intended to use its stores for Phase III or IV clinical trials, but the actual delivery of the trials is much more complex than a primary care visit.
Moreover, the clinical trial business had a boost during the COVID-19 pandemic and has seen a rapid decline since then, forcing major businesses to reevaluate their strategy for the coming years. CVS Health’s clinical trial business was launched after the success of the COVID-19 vaccine trials which saw around 300,000 volunteers facilitated by CVS. This scale was not reached in the later trials which only received around 33,000 participants.
The announcement also came on the heels of CVS’s acquisition of primary care company Oak Street Health and home healthcare provider Signify Health. These acquisitions are CVS’s biggest deals in the past couple of years and will help CVS expand faster.
Other Pharmacy Retail Giants with Clinical Trial Services
Shortly after CVS launched its clinical trial unit, pharmacy retail giant Walgreens also launched its Health Research Initiative in June 2022, and Walgreens recently announced a major collaboration with Prothena for an Alzheimer’s disease clinical trial. Walmart followed suit by announcing its Healthcare Research Institute targeting the clinical trial space in October 2022. And in January of this year, Kroger Health also started its venture in the clinical trial business in collaboration with Persephone Biosciences .
All of these companies are focusing on decentralized trials in which patients are able to participate without being in a hospital-based setting.
Other than these established businesses, there are several startups in this space such as Topography Health, Paradigm, Power and Inato, all targeting clinical trials.