CVS Health Corp (NYSE:CVS) has had a rough go of it during the past year. Over the last twelve months, shares in the pharmaceutical drug store chain and pharmacy benefit manager (PBM) have dipped significantly, falling 19%. Rubbing salt in the wound is the fact that the S&P 500 has increased by 11% over the same time period, meaning CVS Health investors have lost to a basic S&P 500 index fund by 30 percentage points in a year's time. Ouch!

The stock price has fallen as the business has struggled, losing important deals to rival Walgreens Boots Alliance and dealing with increasingly hot online competition from Amazon.com, Inc. Last November, CVS CEO Larry Merlo outlined a four-point plan for the company to return to healthy growth. The first step of the plan, as Merlo described it in the S&P Capital IQ transcript of the company's second quarter conference call, was "leveraging our enterprise capabilities and CVS Pharmacy's compelling value proposition to partner more broadly with other PBMs and health plans."

Since the plan was implemented, CVS has announced three new partnerships that seem to be of the scale and magnitude necessary to drive growth in the quarters and years ahead.

CVS pharmacist in white lab coat assists elderly female customer in store aisle.

CVS Health hopes its new partnerships can help drive growth. Image source: CVS Health Corp.

An Optum partnership for optimal returns

UnitedHealth Group Inc's (NYSE:UNH) Optum is a health services business that uses technology to deliver integrated solutions. Late last year, CVS announced a new shared pharmacy platform with OptumRx, Optum's PBM, that serves 65 million customers and fills 1 billion prescriptions annually. Under the new platform, the two companies will be able to give employers better value for the health insurance plans they offer to their employees such as allowing OptumRx members fill their prescriptions at CVS locations for the same cost as they can through Optum's home delivery plan.

For CVS, the idea is that some of OptumRx's massive customer base will fill their prescriptions at CVS stores, boosting foot traffic and hopefully driving front store sales. The program officially launched this July and, according to Merlo, the company has "already seen some uptake from clients, and the pipeline of additional opportunity in the coming years is promising."

A significant deal with Cigna

In June, CVS announced a partnership with Cigna Corporation (NYSE:CI) in another initiative that CVS hopes will drive traffic to its pharmacy and retail locations. Under this arrangement, Cigna members from self-funded employer-sponsored plans will be able to get discounts on preventive visits to CVS MinuteClinics and CVS Health-branded over-the-counter products. Eligible Cigna customers will also receive Health Tag Messages on their medication's prescription bags which can include anything from doctor instructions to information about Cigna's complementary benefits. As Merlo commented during the conference call, the deal "leverages the CVS footprint".

Cigna has over 95 million customer relationships around the world, but it was unclear how many of those are eligible for benefits under this arrangement.

An express deal for growth

It might be surprising to see Express Scripts Holding Company (NASDAQ:ESRX) on this list since it is one of CVS Health's chief competitors in the PBM space. That didn't stop Merlo from announcing a new partnership with the company in which CVS will serve as the retail anchor for Express Scripts' diabetes care value program, a performance-based program in which customers must meet certain medical adherence thresholds.

Express Scripts also has a massive reach, with over 83 million members filling 1.4 billion prescriptions annually.

Are partnerships the right prescription for this sick pharmacy?

CVS has an impressive number of assets it can leverage to reach out to new partners and deepen its existing relationships. These assets include over 9,700 retail stores  and 1,100 clinics. The sheer number of locations simultaneously gives CVS the advantage over nearly any other competitor in terms of accessibility and scale, making it an extremely attractive partner for insurance companies and PBMs.

If CVS's existing deals drive traffic into the store, lifting front store and pharmacy sales in the process, don't be surprised to see more new deals soon. As Merlo put it in his prepared remarks during the company's second quarter conference call, "As we look to return to healthy growth, we continue to be very focused on partnering with all payers to drive volumes and capture share, and these conversations have already yielded excellent results." 

Management still maintains its long term guidance of 10% EPS growth over time, though the company has not yet given specific projections for next year. Given its projections, its relatively cheap valuation (its P/E ratio is less than 13.5), and its safe (and growing!) dividend, shareholders might want to give management time to see if its turnaround strategy will work. Even if CVS does not meet its own guidance, it seems to be one of the few stocks in the current market with a reasonable valuation and future growth prospects. If these partnerships can even add a little "oomph" to the company's top and bottom lines, investors might see market-beating returns for years to come.  

Matthew Cochrane owns shares of Amazon and CVS Health. The Motley Fool owns shares of and recommends Amazon. The Motley Fool owns shares of Express Scripts. The Motley Fool recommends CVS Health and UnitedHealth Group. The Motley Fool has a disclosure policy.