CVS raises annual profit forecast on improved drug revenues

CVS 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.

The company this year said it decided to slow expansion plans for Oak Street, which provides services to older adults, and plans to close 16 underperforming locations.

CVS first raised its guidance this year after beating first-quarter estimates and controlling medical costs. The company has said medical costs in its Aetna health insurance business are above historical levels.

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.