CVS raises annual profit forecast on improved drug revenue

The results from the company were broadly in line with rival UnitedHealth. Its peer lifted its forecast in July on improved medical cost controls, raising the bar for health insurers this earnings season.

Health insurers have faced persistently high costs for the last three years due to increased use of healthcare services across the government-backed plans. They have been raising prices, cutting benefits and pulling less profitable plans from the market.

CVS said that while it was raising its outlook for the year, it remained cautious in light of continued elevated cost trends and the potential for a difficult macroeconomic environment.

It increased operating profits at the company's health services unit, which also includes clinics, by 10% to $1.73 billion from $1.58 billion, driven by changes to how the company operates its Oak Street primary care business.