WOLFE RESEARCH HEALTHCARE CONFERENCE 2026 - CVS HEALTH CORP

live. My name is Justin Lake. I cover healthcare services here for Wolf Research. Thank you all for attending our healthcare conference here this morning, and I'm pleased to have with us the management team from CVS, specifically the company's chairman and CEO, David Joyner, as well as EVP and group president and to-be CEO of the company'S pharmacy business, Prem Shah. So, obviously, a lot to cover. Company made a major announcement last week along with a very strong set of earnings. That kind of overwhelmed, from a news flow perspective, those earnings. We'll talk about both. David, maybe just to start off, the breakup came as a surprise to a lot of investors. I know this is something that you work on intermittently. You're always looking at options. Maybe you can talk about what changed this time versus previous iterations here and what makes you confident this is the right time to kind of break up these businesses. Yeah, sure, Justin. Thanks for having us this morning. This obviously came as a surprise last week. So I think as I look at the process that you normally go through in terms of running and operating a business like this is that every year, if not more, You're constantly looking at the asset and the ability to be able to compete in the marketplace. And I look back on my 40-year career with this company, and this has been somebody or a company that's constantly changing and iterating to make sure you're positioned appropriately in each one of the respective markets. And it started almost 20 years ago when CVS and Caremark came together. I think the operating dynamic and the things that we were trying to solve for then are still the same today, but it's obviously the market, the regulatory environment, the competitor and the customer dynamics change and evolve. And so I think that the most important part that we look for is making sure that each one of the companies continue to perform. As I look back, you know, two years ago, it was very clear that my focus was on continuing to improve the recovery of the Aetna business, and more specifically, continuing to invest heavily in our retail business. So I think that was the focus then, and I think the focus now is especially working on the strength of our respective businesses, is making sure that we actually look at the businesses in terms of how they can perform. And I think what I feel really good about right now, and you'll hear this theme of one great company becoming two great companies, and that we are looking at the strength of each one of the respective businesses and being able to have the long-term durable growth. Got it. And, you know, you talked about regulatory pressure specifically. Maybe give us a little bit of color here in terms of how you've seen that evolve, where you think it's going, specifically, you knows, the regulatory pressure we've seen on the pharmacy business, vertical integration in general. Yeah, I mean, it's clearly the regulatory environment has changed from 20 years ago when CVS and Caremark came together, all the way from just even eight years ago when we acquired Aetna. So I think just this iterative process of what we call kind of the degrees of freedom to be able to run our business has changed. And so as we look at that, that's certainly one of the things that we assess and or evaluate in terms of how we want the companies to be operating and competing. But I think more importantly, if I kind of look back on the reasons why, because I think you're probably getting to why now and why we're making this thing today versus two years ago. Two years ago, obviously, kind of what I mentioned earlier, our focus was on making sure that we recovered the Aetna margin, and we spent two years of demonstrating that that is going down what we believe is a very successful path. And then we were also guiding down 5% in our retail business. And so when you look at the decisions that we were able to make two years ago versus today, we talk about this being a position of strength. And I think most importantly, we're in a place that each one of the businesses are running and operating and we believe have the ability to compete on their own as opposed to just necessarily part of a larger enterprise. got it and you know one of the the you know most frequent questions i've been getting from investors is in regards to the remain co-structure specifically the rationale for keeping cvs specialty with cvs health given the focus on pbms owning pharmacy delivery it's a it's it's a really good question and certainly one that we've given quite a bit of thought to in terms of what is the right asset perimeter the right structure for each one of these businesses to be able to compete. As I look at what CVS Health remains, it is a focus on what I would call the high-acuity, you know, high-cost markets. We've talked a lot about the Medicare business a minute ago. Equally as important is the growth of specialty pharmacy, and that is and will remain the fastest-growing part of specialty. It has a, in order to be ableto compete in that marketplace, you should be able to have some control over both the formulary and the brand purchasing, creating a competitive dynamic. And we believe it best fits within a PBM structure because that is exactly what a PPM does. It actually creates competition. It actually allows you to deliver value to what your customers want, which is the ability to control and manage the fastest growing part of health care. So we think it fits naturally within the PBM for competitive reasons. And we also think it builds on this focus of CVS Health, which is the organization that is going to continue to address the fastest and most important parts of the growth in health care. Got it. And do you feel like, you know, there's obviously been a lot of focus on the pharmacy side and from independent pharmacies and they've got, you Know, swung a much bigger stick than one would think at the at the state level. How do you think, you know, if you were to sit there and advise investors on how to think about the regulatory viewpoint towards you of a, towards, you know, PBM and a retail pharmacy that Prem's going to run versus a specialty pharmacy, do you think there is a dividing line there that, you know, is going to be able to keep that specialty pharmacy as part of the PBM that's differentiated versus the retail viewpoint? I think that's right. So when we are in the various states, especially with a very strong independent pharmacy voice, they are targeting, for the most part, PBMs that have a retail pharmacy attached to it. And in large part, because that is the natural competitive landscape for the independent pharmacies versus specialty, which we've talked about specialty for the 80 plus percent of the specialty products come into market, come through a limited distribution channel. The manufacturers decide the channel that they want their products dispensed from, and the independents up to this point have not played a role in that market because it requires deep expertise and specialization in therapies that we believe our specialty pharmacies uniquely positioned to compete. So it takes at least some of the pressure of whether or not the PBM is creating an uncompetitive dynamic in a given state for an independent pharmacy. So we've talked a little bit about this end-of-one risk for us that we believe we're solving for and actually should be able to allow the independents to compete appropriately now with a much stronger competitor with CVS Pharmacy. Got it. Maybe based on your discussions and some of the reactions you've seen from investors as well as your clients and peers, what do you think might not be clear here? What do you think are the biggest misconceptions out there on this transaction? Outside of it being a surprise on day one, I think I would say a couple different things. One is the dis-synergy number that people have referenced is much larger than certainly what we have in our own outlook for these businesses. And part of what we're here to do is make sure everybody understands where the synergies are coming from today. and then what we believe the dis-synergies will be going forward. I think the second piece is the capital structure. We've talked a lot about these being solid investment-grade businesses and the fact that we are not spinning off a weaker company. We're basically forming and creating two really good companies with solid investment grade balance sheets and the ability to grow and create value in their respective markets. So there is this opportunity to showcase the value that we that we plan to create within each one of the businesses. And then lastly, it's it's do we actually have an appropriate peer as we're, you know, as as we create these two two companies? And I think in each one OF the these companies, we are going to demonstrate that we can grow faster alone than we can together. And within the CVS Health remaining companies, we have a large, diverse set of companies that are participating in the fastest growing parts of health care. And so we should be able to compete and capitalize on our ability to solve those problems going forward. And I think equally as important, CVS Pharmacy has demonstrated growth over the last two years and I think has a pathway for growth going forward and creating new value as a result of being independent as opposed to being part of our larger enterprise. Got it. Prem, maybe if I kick it over to you, I think a lot of us saw you as an important part of the succession planning within CVS overall, giving your track record and turning around the pharmacy, et cetera. What about the opportunity to lead a standalone CVS pharmacy has you excited to take on the CEO role there? Yeah. Hey, Justin, thanks for the question. And David, thanks to the trust in nominating me the CEO of CVS Pharmacy. I'll just start with this company has incredible opportunity in front of it. It's a tremendous company. And I think as we went through this process, one of the things David said is it's one company becoming two great companies. And for those who don't know, I'm a pharmacist by training. I spent pretty much my entire career up until 2021 inside a specialty pharmacy in the PBM. So that is a tremendous business, and I think about our Caremark asset as an essential component. And, you know, when you think about CVS Pharmacy, I just think it is an amazing asset. And if you take a walk down memory lane with us, it was just three or four years ago when I came over to the retail business that we actually guided Minus 5. And what we realized at that point is we had a few challenges in that business. One is we had a reimbursement problem where our cost of goods was not improving at the same level as our reimbursement erosion. We had to solve that, and we launched something called CostVantage. Number two, we had an instructional service issue inside of this business that we had to go fix, and we had go do that through technology. And number three, I just felt like we had this tremendous asset in our 30,000 pharmacists and our 200,000 colleagues to reimagine and reshape pharmacy and healthcare in this country at a scalable level across all the communities we serve. And, you know, one of the facts that still remains and that will be essential is healthcare will always be local in this county. People can debate. It will be powered by technology. Technology will transform it, but it will be local and be strongly believed that the asset we have is the right one. But if you fast forward to today, we went through that and we went from a minus five trajectory to flat at our last analyst day and, you know, at earnings call, we got it to low single-digit growth. And this will be our third year in 27 in a row where we're growing AOI at PCW or CVS Pharmacy. So we're incredibly excited about where we are headed. I would just say the other two points for me is I think when I think about the opportunity in front of us and to lead this business, Justin, one thing that is amazing is healthcare continues to be unaffordable. It continues to Be local. We have an asset in which we can transform and reshape that. We have a solid pharmacy business that has, you know, retail script growth will continue to grow just based on the aging population and other things. We have a tremendous opportunity to expand into adjacent spaces, whether that's in a D to C offering or with other types of health care services that are out there. So to me, this is an incredible opportunity. I'm incredibly proud about the results we have. And, you know, this ist one of the most tenured leadership teams that exist operating this company. We have an tremendous team that's leading this business as we go forward. But the opportunity here is something that, you now, America needs. It's a foundation of health care in this country, and I think it's going to be something that we will continue to help shape and reshape in terms of how we can play a pivotal role in improving health, improving access, and lowering costs for the patients we serve. That's helpful. So maybe we just kind of knock through a few of the questions or the uncertainties that have been brought up by investors as part of this transaction. And, David, you mentioned one that's come up, the synergies. I know there have been numbers out there north of a billion dollars. I've talked about a number closer to 500 million than a billion. Where do you think the right ballpark is? I think your second number is much closer to the number that we have in our models, and we're going to have some one-time costs. So I think you're going need to stand up as separately publicly traded companies, so that obviously is part of the expense. But there are these synergies that people are suggesting that CVS Pharmacy loses or CVS Health loses, just not there. And I think we've talked a lot about CVS Pharmacy and Caremark coming together 20 years ago. There was a firewall that was in place, and it's operated for two decades. And so how we're running and operating these businesses have been, for the most part, separate. And so I think these notions of having large synergy that's attached between those two businesses is just simply not there. But we do – we'll have to solve for, obviously, these one-time expense items that we think is a much more manageable number. Maybe just to add to that, Justin, there was a lot of questions that came up around our cost of goods and if we lose any competitive advantage. I'll say two things that are really important. One is the way we've structured this, there's two components of cost of good. One, if you look at the CVS health component around brand COGS, all of our ability to manage brand cost of foods and create competition on that side with Caremark continues to exist. And so we'll continue to have that as part of a core element of what we do. And if you look at the other side in terms of CVS Pharmacy, one of their value propositions is really around generic cost of goods. We've had a 10-plus year relationship with Red Oak Sourcing, with a large wholesaler. We'll continue to have that. We'll continues to be the largest purchaser of generic drugs in this country, and we'll continue leverage that to pass that through. And remember, it's really important, part of the premise of what we did with CVS Cost Vantage is we're taking those industry-leading cost of good and we're actually passing it through to all payers, Caremark plus all the others. in terms of the new reimbursement model. So the benefit of that will continue to accrue to the health care system in terms how we structure that, and I think it's a really important point because that would be a critical component of what we do is ensuring that we can pass those cost of goods back to our customers. Maybe I'll add just one more element to the generic purchasing. When CVS and Caremark came together 20 years ago, we had a large mail service operation as part of Caremark, and we thought we were a good purchaser of generics until we saw the cost of goods position that CVS had. And so this is a volume game. And the larger you are, the more efficient and the better purchase you have. And we've only grown and actually become stronger, and that is, as Prem suggested, the red oak. So as we look at the CVS pharmacy with the ability to compete aggressively in the generic marketplace, we think they are set up for success. And that's, in large part, why we've organized the assets the way that we have. That's good to hear. And that COGS position, Prem, is definitely something that's come up. Just to follow up on your dis-synergies, I want to make sure I understand it from the perspective. It feels like there's two buckets. There's one bucket that's the dis-s synergies from the prospect of just, hey, we've got two corporate headquarters now, and we've got two sets of attorneys, everything. So that's going to be run rate, and that's the $500 million I was talking about. That's you'll have to work to kind of overcome that as you go forward. Then there are these one time costs of separating the companies. That'll be one time then push, you know, obviously a cash cost, but it'll be it won't be reported within the numbers of investors don't have to worry about that running through your EPS. Right. OK, perfect. I think one of the other questions on this synergies prem is the thought process. The company's done, you know, like you said, three years ago, you were in front of investors saying minus five was the right number for pharmacy, right? And I think it was at the time before you kind of turned that, turned it around. And, you Know, then it became flat, then now it's become low single digit, right. And some of that's come from share gains, some of those come from rolling out cost advantage. Maybe you can talk about, like, one of the questions I've gotten is, you know, how much benefit was there, for instance, to rolling out cost advantage, having Caremark there alongside of you saying, we'll sign up first, right? And how much did that help you with ESI and negotiating with Optum? Or, you Know, in the share gain side, how many of those share gains have come from, you Know, recently from, You know, agreements with that name Caremark in terms of moving share towards you? So maybe you can delineate that for us to kind of help us understand what this thing will look like standalone. Yeah, I think it's a great question, Justin. And recall, you know, when we launched CostVantage, there's a few things, right? One is one of the challenges we had in pharmacy was cross-subsidization of the strips. And so when you had that cross-substitization, it actually created a lot of challenges for consumers at the counter in terms of what their pricing, et cetera, is. So that was one. And so, when мы launched CVS CostVintage, Caremark also launched TrueCost at the same time. And this is a model in which we are driving transparency and really pushing the model forward in different ways. So, you know, we knew we had to invest in cost advantage at the beginning. So we invested for the last two years to get all of our clients over in the commercial market and MA. And we're proud to report today we have all of ours scripts on a cost based model as we go forward. I'll just give you a couple of tidbits. The industry has been evolving. And if you think about Caremark, if you go back 10, 12 years, one of the biggest levers they had was creating value in the network. So PBMs, large PBMS, would essentially select one large national player and potentially as the PBM switched or one business, you'd go from one large natural player to the other. But that's evolved over time, partly because of some of the state regulations, partly because of the fact that the disparity between narrow and broad networks has come together drastically versus a long time ago. So that's one of the things we've seen if you look at this over a longer period of time. And I'll point to a few. We had a pretty large MA PBM loss inside of Caremark just two or three years ago. And we remained as the preferred pharmacy on the CVS side to this day with that customer. And it's because we continue to provide tremendous value for that customer and we're partnering with them, whether it's Caremark or another PBM, we continue to partner. So I think this notion of where there was just large movement of share from one pharmacy to the other is not happening anymore because the delta between the value in narrow and broad networks is nowhere near where it used to be. So I think it's a really important point, Justin, that gets lost in this. And the second is, I would just say, is when you think about what we're providing in our value proposition as CVS Pharmacy, we have the lowest cost of goods. It's proven through Red Oak sourcing and what we are passing through in cost advantage. But we also have the lowest cost structure in terms of what we were doing. So the payers have a tremendous value in terms of what they're getting out of CVS Pharmacy to care for their customers and to continue to deliver that service. And all of this wouldn't be possible if the service wasn't strong. And so if you think about the leadership team inside of CVС Pharmacy, if you Think about what we've achieved over the last three years, it was founded in ensuring that we were operating at our highest levels of service and that we will continue to do that. Because we know that in order to continue To grow that business, our service levels have to be at the highest level in terms Of the marketplace. So I think there's just important dynamics of what's evolved over time, Justin, in terms of network construct and what's happening in the marketplace. That's helpful. You talked about leadership at the companies. Maybe you can talk about how you see the leadership during this transition and how you expect, you know, who's going to go with Prem versus going to stick around at CVS Health. I've been in the job for two years now, and that has allowed me to build and essentially elevate a best-in-class leadership team. And you look at the role and the work that we've done at Aetna, we've obviously over the last couple of years have continued to bring in outside talent, but also grow internal talent. And I think we're running and operating as well as anybody in the marketplace on the AetNA side. I came out of the Caremark business, and if you look at what we've done in terms of leadership there, Lynn Shankman now is running the larger Caremark pharmacy services business. We've elevated the person running our health care delivery business. These are all people that will stay and will have obviously brought years of experience and actually have performed exceptionally well over the last two years. The retail business has run, as I've said, for the most part, independent. And Prem, obviously, coming out of that organization, he knows it well. It is stacked with tenured leaders that have proven year in and year out. And in the tough times when people were questioning what the future of retail is, those are the ones that have actually created this environment that Prem talked about. They are the one that have leveraged their cost position. We've got the operations running as efficiently as anybody in the marketplace, and the NPS scores and the consumer experience is at all-time high. So we've done all of this stuff with the same team that will actually be running and operating, and I think that's why Prem, for me, selfishly, it's a little bit bittersweet to have Prem run and lead the organization. But I couldn't be happier for somebody who actually has demonstrated performance, innovation, and actually a great followership within our business. And just one other thing. The short-term execution is critical. And you look at David and Brian's journey with David as CEO, eight quarters in a row, a beat and raise. We are not losing sight of the short-terms. We will continue to deliver our results and remain focused on the value proposition until that's been happened. So I would just say on that side as well, the team and the entire company is focused on delivering, you know, strong results as we go to 27. And, you Know, that kind of brings us to, I think it's important for investors to understand the trajectory of these companies as standalone businesses. So, Prem, maybe you can start us off, you Now, in terms of what do you, how do you want investors to view CVS Pharmacy from a growth perspective? You guys have given your most recent investor day, you gave numbers out to 2028, and you wanted us to look at it holistically. And I know you've got a lot of ways to hit those numbers, and I think everybody in this room expects you to beat them. But in terms of the longer-term growth rate, the algorithm that you want us to think about CVS Pharmacy from, and obviously that's going to play into the multiple that's assigned to the company, how do you want to view that? Yeah. So, and you heard us say this prior. First off, it's extremely exciting to lead this. And there's three things I would say. We're going to have solid investment grade ratings in terms of CVS Pharmacy and CVS Health. So it's coming from a strong starting point, solid investment rate, strong balance sheet. CVS pharmacy continues to generate strong free cash flow in terms of that business on its own. If you look at the retail pharmacy industry, right, the aging population and some of the tailwinds of that business continue to exist. One of the biggest challenges this industry had was reimbursement pressure. And if you think about what we've done, as you look beyond 28, we expect the reimbursement pressure to stabilize for the most part. And so when you start to think about that, that leads to a different structural opportunity as you think about CVS Pharmacy. That's point one. The other things that are extremely exciting is, you know, there's no other healthcare asset that has 9,000 local touch points where we can really transform care. And, you Know, I would use one example. So the DTC offerings and weight loss and other things, you Now, candidly, that was one area where VC, we have tremendous opportunity to continue to reshape how those solutions come to market, how we continue to create, you know, differentiated solutions for pharma in that space, but also with other payers, right? We see a tremendous opportunity to continue to create value for other payers in terms of clinical services and other services that continue to come out. And we're the solution in terms of if you want a healthcare service that can be done at scale across this country, there's no one better than us to deliver that in a technology-efficient way in the local community. So I think the underlying trends of this business and the industry are really strong. I think when you look at our core operations and where we're positioned to succeed, we continue to remain really excited in terms of that. And we're starting from a point in which we're going to have a solid investment grade rating. We're going have a strong balance sheet. We can continue to generate free cash flow. And then we're gonna invest in those adjacent spaces. And as we go throughout, you know, 27, we'll be able to lay that out further for you guys in terms of that value proposition. Is there any reason to think that if reimbursement, which I know has been the biggest pressure to the pharmacy business over time, if reimbursements does stabilize, is there any reason to thing that this business can't be a mid-single-digit grower and maybe better with some of the opportunities you're talking about? Yeah, I mean, look, at the end of the day, if you look back and you look at the things that are structurally created challenges in this business, right, our recipe is pretty straightforward, right? Stabilized reimbursement pressures, growth scripts slightly above market, right. Continue to create adjacent services. And so we're committed to do that, Justin, in terms of the way we structure it. And we're excited about that as you go forward. As we lay out this over the course of the next year, I think you'll see kind of that recipe coming to market. Got it. And then, David, moving over to the health business that you'll be still running. On the managed care side, I think investors continue to assume mid to high single-digit growth, right? You've got a pretty big operation on fast-growing Medicare Advantage business. Maybe talk a little bit about how you see the risks of things like 340B pressure, continued push towards fee-based models on the PBM, versus the potential offsets of things like Oak Street and getting back some of those rebate guarantee losses you talked about. So let me try to answer the same question that you asked, Prem, and then I'll get into the specifics. I think what CVS Health remains is a company that's still participating in the fastest and what we believe is the most attractive parts of health care. So the Medicare franchise, to your point, we've made two years of progress, And I think going into a third year, based off the indications that we provided last week during the earnings call, is that we believe that businesses are going to continue to grow and return to what we think are the appropriate margins. And it's going to be coupled with the investments in our value-based care, Oak Street, and Signify assets. So those, at combination, we believe we're uniquely positioned to tackle what we know will be a challenge in terms of affordability and access in this country. The second piece is in the PBM, and I look at still having the largest specialty pharmacy in this country and the opportunity to get our arms around one of the top pressures our customers are facing is how do you get your arms around the cost and the management of this category. So I think the strength of specialty on top of the tailwinds that we will get as we work through what we have talked about the last year plus and some of the rebate guarantee mitigation, some of 340B, that stuff should be in kind of getting through 27, which we indicated would be a trough year. We think, obviously, we will return to the growth rate that we had suggested. And then kind of to Prem's point on the balance sheet, these are two great companies, and I think there's been questions about, you know, are you going to be able to deploy the capital, and or have you lost any leverage? And we don't need to deleverage, so as you look at where we are, I think we indicated it was $35 billion of value that we talked about at Investor Day. Even as we kind of work through the debt-to-cap issues that we'll have on CVS versus the debt to EBITDA on CVF Pharmacy, we believe that we're going to create two strong companies that one won't be weaker than the other. The idea is that we actually will have the ability to do the appropriate dividends, same things around share repurchase, and then we'll actually be focusing on appropriate M&A where possible. So these are all things that we thought through as we've talked about how we want each one of these businesses to be set up for success. Got it. That makes a lot of sense. And specifically, I think the debate right now has pivoted to HSS and the ability to grow post-2028, given the uncertainties on things like 340B and some of the fee-based models that are being transitioned here. And one of the things I've tried to get investors to kind of understand that feels unique about your HSS and your PBM business versus others is you're sitting there with losses at Oak Street that I've estimated is post-2028 or 2027, I should say, is in the $500 million range. You've got rebate guarantees that were $500 billion. So you're sitting at a number of losses that should be coming back to the company one way or the other over 28 and 29 that are almost a billion dollars, right? That's 10%, 15% growth to the PBM business before the PPM has any core growth. So do you think investors kind of understand that and, you know, do you feel confident in that ability to deliver Oak Street and rebate guarantee losses back so that it kind of, in my mind, de-risks the PBM relative to others as we're going into this period? So your numbers are in the right ballpark, and I think that's exactly right. The health care delivery business, specifically Oak Street, we have made considerable progress on its recovery, and the team could not be performing better at this point in terms of where we expect it to be and where we're headed. So I think there's obviously going to be – we don't talk a lot about the Oak Street business, but I think it's an area we obviously – we're going to see some positive contributions. And then the rebate guarantee issues and has been a large part because of the pricing model that we've operated, you know, from yesterday. And as you look at some of the things coming out with both the FTC as well as the CAA and even for that matter, the Department of Labor notice, these are all things trying to change and evolve the pricing models. So things and the pressures that we're still negotiating through with our customers will be on a whole new pricing convention moving forward. And so I think these are all things that will be mitigated and will be managed appropriately as we get from kind of point A to point B on kind of the future model. That is very similar to what's happened on the CVS pharmacy side on its migration into cost advantage. Got it. And specifically going back to your comments on leverage and cash flow, the question I asked on the call was really around the – at the investor day, you talked about $35 billion of deployable capital, right? And I know that was split between the cash the business is going to generate over that time frame, as well as you recapture earnings, you have leverage opportunities when you were running on a debt-to-EBITDA basis. As the business transitions, CVS Health will become debt-to-cap, right? And so that, you know, the balance sheet starts to matter there. My understanding is you still feel like that $35 billion of deployable capital is the right number. It's just going to be split between the two companies, and we'll figure that out as we go along. Is that the right way to look at it? Yeah, I think it's exactly the rightway to lookat it. And so we realize we've got to now split in terms of how we continue to focus on solid investment grade positions. And that's exactly how we're thinking about setting each one of these businesses up. And so I don't think we're not going to lose our focus on how we want to deploy the capital, which we've been very disciplined the last two years. I think we'RE going to continue to be very disciplined going forward. but we have not lost any leverage or we've not lost any opportunity to create that flexibility because of how we've been performing the last two years and how we expect to continue to perform as two separate companies. Got it. Maybe I'll just end with the Medicare Advantage business has, like you said, been outperforming the targets that you've set over the last couple of years. Maybe you can talk about how you feel during kind of heading into or heading out of AEP now and your setup for 2027 and how that positions you to get back to that 3% margin or better target in 2028. So this is now our third year of what we believe dialing in the areas where we have the right to win. And I think the good news is, is that what we've learned over the last two years is carrying through into our third, which is we believe we're in the right markets with the right products, with the right cost position. And we think this has actually served us well going through this open enrollment. It's early yet still in terms of where we'll be talking. We'll obviously come back in February with a much more robust answer on this. But the most important thing for us is that we have prioritized the margin over growth. And going into now 28, I don't expect anything will change in terms of the recovery and the target margins that you suggested. So that is, again, part of the discipline of this team and part of what I think now has become, you know, a seasoned expert group that really understands the levers that you can pull to be able to compete. That's really helpful. David, Prem, I appreciate your time today. Thanks for being with us. Thank you, Justin.