CVS (CVS) reported first quarter earnings Thursday, beating Wall Street's expectations. The company also raised its full-year 2025 guidance, with adjusted earnings per share now expected in the range of $6.00 to $6.20, up from $5.75 to $6.00.

CVS reported adjusted earnings per share of $2.25 compared to Wall Street's consensus of $1.69. Revenue came in at $94.6 billion, compared to estimates of $93.6 billion.

The Street had been concerned about Medicare Advantage players, like CVS's Aetna, after UnitedHealth Group's (UNH) miss, in part related to higher-than-expected utilization of Medicare Advantage, which would have extended a concerning trend last year. 

But with the improvement in medical loss ratio (MLR) — the ratio of premiums received to claims paid out, mandated to be at 85% by the Affordable Care Act — CVS has helped show the hit to UnitedHealth was a one-off.

CVS reported an MLR of 87.3%, in line with peer Humana (HUM), and a 3% drop from the same period in 2024, when the company reported 90.4%. 

The company attributed the improvement to the increased star ratings of its plans, awarded last year, which results in increased payments from Medicare. In addition, CVS has exited the ACA marketplace, which gave it more control over cost management.

Weight-loss boost

CVS announced two key developments in the hot weight-loss market Thursday, marking a shift from insurers that are ending coverage and employers that have put restrictions on access and coverage.

The first development was placing Novo Nordisk's (NVO) blockbuster GLP-1 drug Wegovy as a preferred drug on its formulary for later this year. 

That means patients will be steered to Wegovy if they are prescribed a weight-loss drug and have CVS Caremark as their pharmacy benefit manager (PBM).

CVS "is taking a formulary action on July 1, 2025 to prefer Wegovy for its members. The company will enhance the value of these new medications by combining them with additional lifestyle clinical support as part of the CVS Weight Management program offered to clients through CVS Caremark," the company said in a statement.

Caremark is one of the largest PBMs in the country, boasting a 27% market share. 

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The move could help Novo, which has recently been lagging competitor Eli Lilly (LLY), with new prescriptions for weight-loss injectables. 

The second major development Thursday was CVS noting it is the first retail pharmacy partnered with NovoCare, Novo's online direct-to-consumer platform. To date, Novo has partnered with telehealth and online pharmacies — most recently popular platforms Hims & Hers (HIMS) and Ro.

"This will enable CVS Pharmacy to provide convenient, safe and affordable access to Wegovy for eligible patients at its more than 9,000 community health locations across the country," CVS said in a statement.

Anjalee Khemlani is the senior health reporter at Yahoo Finance, covering all things pharma, insurance, care services, digital health, PBMs, and health policy and politics. That includes GLP-1s, of course. Follow Anjalee as AnjKhem on social media platforms X, LinkedIn, and Bluesky @AnjKhem.

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