CVS Caremark

Infobox_Company
company_name = CVS Caremark Corporation
company_
company_type = Public (NYSE: [http://www.nyse.com/about/listed/lcddata.html?ticker=CVS CVS] )|
foundation = 2007 through merger of CVS/pharmacy and Caremark
company_slogan = For All The Ways You Care
location = Woonsocket, Rhode Island, United States
num_employees = 160,000 (2008)
products = Retail - Pharmacy, Pharmacy Benefit Management
revenue = profit$76.32 billion USD (2007)
operating_income = profit$4.793 billion USD (2007)
net_income = profit$2.637 billion USD (2007)
homepage = http://www.cvs.com/corpInfo/

CVS Caremark Corporation (nyse|CVS) is an integrated pharmacy services provider, combining a United States pharmaceutical services company with a U.S. pharmacy chain. CVS Caremark provides pharmacy services through its 6,200 CVS/pharmacy stores; its pharmacy benefit management, mail order and specialty pharmacy division, Caremark Pharmacy Services; its retail-based health clinic subsidiary, MinuteClinic; and its online pharmacy, CVS.com. CVS Caremark Corporation is chartered in Delaware, and is headquartered in Woonsocket, Rhode Island, where its pharmacy business is also headquartered. The pharmacy services business is headquartered in Nashville, Tennessee.

CVS Caremark has two operating segments: CVS/pharmacy and Caremark Pharmacy Services.

*CVS/pharmacy is the nation's largest retail pharmacy chain, with approximately 6,200 stores across 38 states. With more than 40 years in the retail pharmacy industry, CVS/pharmacy generates over 68% of its revenue from the pharmacy business. CVS/pharmacy fills more than one of every seven retail prescriptions in America, and one of every five in their own markets. Their ExtraCare program boasts over 50 million cardholders, making it the largest retail loyalty program in the country.

*Caremark Pharmacy Services, one of the nation's leading pharmacy benefit management (PBM) companies, provides comprehensive prescription benefit management services to over 2,000 health plans, including corporations, managed care organizations, insurance companies, unions and government entities. With net revenue of approximately $37 billion (including approximately $5.8 billion of retail copayments) in 2006, they are also one of the largest PBMs. Caremark operates a national retail pharmacy network with over 60,000 participating pharmacies, as well as 11 mail service pharmacies. Its call centers have been recognized for customer satisfaction excellence by J.D. Power & Associates. Caremark operates over 70 specialty pharmacies, and its specialty pharmacies have been accredited by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO). Its disease management programs through Accordant(R) have also been accredited by the National Committee for Quality Assurance.

Name

The lineage of CVS Caremark Corporation can be traced back to Melville Corporation, formerly based in Rye, New York. Melville was a large retail holding corporation incorporated in 1922 as the Melville Shoe company. It changed its name to CVS Corporation in 1996. In March 2007, CVS Corporation completed the acquisition of Caremark Rx Inc. and changed its name to CVS Caremark Corporation.

CVS

The CVS name once stood for Consumer Value Stores; though Thomas Ryan, CVS Caremark's CEO, has said he now considers it to stand for "Convenience, Value, and Service". [cite web
url=http://privatelabelmag.com/pdf/jan_2006/Ryan-Preaches-PL-to-CVS-Team.cfm
title=Ryan Preaches PL to CVS Team
first=Peter
last=Berlinski
work=Private Label Magazine
date=January/February 2006
accessdate=2008-03-03] The "pharmacy" part of the CVS store name comes from the chain's days as a regional Northeastern U.S. chain. CVS operated many convenience store-type stores without pharmacies, and the "/pharmacy" would be used to indicate the stores that had pharmacies. CVS now no longer builds stores without pharmacies, and many of the "CVS" stores (stores without pharmacies) have been phased out, though a few remain in New England, New York, Washington, D.C., and shopping malls.

Caremark

Caremark was established in 1979 as Home Health Care of America, & changed its name to Caremark in 1985. In 1987, Caremark was acquired by, then became a subsidiary of, Baxter International. In 1992, however, Baxter spun off Caremark as a public company. In 1996, Caremark then merged with MedPartners/Mullikin Inc., with the combined company being called MedPartners. In 1998, MedPartners changed its name to Caremark Rx. [cite web
url=http://www.answers.com/topic/caremark-rx-inc
title=Hoover's Profile: Caremark Pharmacy Services
work=Answers.com
accessdate=2008-03-03]

Acquisitions and growth

*The first CVS store, selling health and beauty products, is founded in Lowell, Mass. by brothers Stanley and Sidney Goldstein and partner Ralph Hoagland in 1963.

*In 1964, CVS has 17 stores that sell primarily health and beauty products. [cite web
url=http://www.cvs.com/corpInfo/about/history.html
title=CVS History
publisher=CVS Caremark
accessdate=2008-03-03]

*In 1967, CVS begins operation of its first stores with pharmacy departments, opening locations in Warwick and Cumberland, R.I.

*In 1969, CVS is sold to Melville Corporation.

*By 1970, CVS operates 100 stores in New England and the Northeast.

*In 1972, CVS nearly doubles in size with its acquisition of 84 Clinton Drug and Discount Stores. The purchase introduced CVS to the Midwest with stores in Indiana.

*In 1977, CVS acquires the 36-store New Jersey-based Mack Drug chain.

*In 1980, CVS becomes the 15th largest pharmacy chain in the U.S. with 408 stores and $414 million in sales.

*In 1988, CVS celebrates its 25th anniversary, finishing the year with nearly 750 stores and sales of about $1.6 billion.

*Since 1990, CVS has been rapidly growing in order to become a national drug store chain.

*In 1990, CVS acquires 500-store Peoples Drug, which establishes the company in new mid-Atlantic markets including Washington, D.C., Pennsylvania, Maryland and Virginia. Peoples Drug stores were converted into CVS stores in May 1994.

*In 1994, CVS launches PharmaCare, a pharmacy benefit management (PBM) company providing a wide range of services to employers, managed care organizations, insurance companies, unions and government agencies.

*At the beginning of 1996, CVS was a division of Melville Corporation. During that year, Melville Corporation divested their other retail companies such as Linens 'N Things, KB Toys, and Marshalls. Following the divestment, Melville changed their name to CVS Corporation & traded on the New York Stock Exchange with the symbol "CVS".

*During 1997, when it had about 1,400 stores, CVS doubled its size by purchasing the much larger Revco drug stores, which had over 2,500 stores. Revco brought CVS into the Ohio Valley and Southeastern U.S.; previously CVS' footprint had not been south of Washington, D.C. CVS could afford such a large purchase because of its recent Melville divesture.

*Also in 1997, CVS ProCare is established as a specialty pharmacy subsidiary of CVS.

*In 1998, CVS acquired 207 stores from Arbor Drugs, bringing its store total to 4,100 across 24 states. The transaction gives CVS its first stores in Michigan and the instant lead in the highly competitive Detroit market.

*In 1999, CVS acquires Soma.com, the first online pharmacy, and renames it CVS.com to become the first fully-integrated online and brick-and-mortar pharmacy offering to consumers.

*In 2000 CVS acquires Stadtlander pharmacy, making CVS ProCare the largest specialty pharmacy in the U.S. at the time.

*CVS has also been expanding its store base through new store openings. CVS entered the Chicago market in 2001, which at the time was dominated by Walgreens. In 2004, it has entered the California market, which is currently dominated by Longs Drugs, Rite Aid, and Walgreens. In the last few years, it has also opened stores in Las Vegas, Nevada, Houston, Texas, and Dallas, Texas, right before its purchase of Eckerd. CVS has also begun to open stores in Arizona.

*In 2004, CVS purchased 1,268 Eckerd drug stores and Eckerd Health Services, Eckerd’s PBM/Mail-order pharmacy business, from JCPenney. Most of the former Eckerd stores that CVS purchased (and converted into CVS stores) were in Florida and Texas. Since JCPenney credit cards were accepted at Eckerd drugs stores, they have been continued to be used at CVS.

*Also in 2004, CVS ProCare becomes part of PharmaCare. All ProCare stores are re-branded as PharmaCare stores.

*On January 23, 2006, CVS announced that it had agreed to acquire the freestanding drug store operations of supermarket chain Albertsons. The deal included the acquisition of 700 drug stores trading under the Osco Drug and Sav-On Drugs banners, mostly in the Midwest and Southwestern United States with primary concentration of stores in Southern California and Chicagoland; and was formally completed on June 2, 2006. Transition of Sav-On and Osco stores to the CVS brand began shortly thereafter, and was completed by December 2006. CVS now dominates the Southern California market. Also included were Albertsons Health'n'Home (now CVS Home Health) durable medical equipment stores. Approximately 28 CVS Home Health locations are present in Arizona, California and the Kansas City area; representing CVS first venture into the specialized DME market.

:CVS had previously operated stores in southern California and completely withdrew from the market in 1993. CVS sold virtually all of the locations to Sav-on Drugs then owner American Stores Company which operated the drug store division as American Drug Stores. Many of the stores in Southern California that CVS has acquired were formerly operated by CVS and most recently have operated as Sav-on Express stores. The Express name was used by Sav-on to help customers identify those stores that did not carry all lines of merchandise as compared to the larger traditional Sav-on Drugs location, hence the name Sav-on Express. As a result of the acquisition, the chain now operates over 6,200 stores in 43 states and the District of Columbia. [cite press release
url=http://phx.corporate-ir.net/phoenix.zhtml?c=183405&p=irol-newsArticle&ID=962787
title=CVS to Postpone Shareholder Meeting to Vote on Caremark Merger
publisher=CVS Caremark
accessdate=2008-03-03]

*On July 13, 2006, CVS announced that it had entered into a definitive agreement to acquire Minneapolis-based MinuteClinic, the pioneer and largest provider of retail-based health clinics in the U.S. MinuteClinic operates as a wholly-owned subsidiary of CVS Corporation. MinuteClinic health care centers are staffed by board-certified nurse practitioners and physician assistants who are trained to diagnose, treat and provide prescriptions (when clinically appropriate) for common family illnesses such as strep throat and ear, eye, sinus, bladder and bronchial infections. MinuteClinic also offers common vaccinations, such as flu shots, tetanus, and Hepatitis A & B. The clinics are also supported by physicians who collaborate with the nurse practitioners to assure the highest quality of care. CVS plans to have 400 MinuteClinics by the end of 2007, most of which within CVS/pharmacy locations, and are targeting a total of about 2,500. [cite news
url=http://www.reuters.com/article/consumerproducts-SP/idUSN1423535420071115
title=CVS focused on integrating mergers
first=Brad
last=Dorfman
work=Reuters
date=2007-11-15
accessdate=2008-02-25]

*On March 22, 2007 CVS formally closes the acquisition of Nashville based Caremark Rx Inc., a pharmacy benefits manager. The company was renamed CVS Caremark Corp. and the corporate headquarters remained in Woonsocket, RI. The pharmacy services business, including the combined pharmacy benefits management (PBM), specialty pharmacy, and disease management businesses, is headquartered in Nashville, TN. Tom Ryan, the Chairman & CEO of CVS remained president and CEO of CVS Caremark Corporation, while Caremark's Edwin Crawford became the Chairman of the Board. On November 7, 2007 Edwin Crawford retired from his position, and Tom Ryan was again named Chairman of the Board.

* On August 12, 2008 CVS announced that they would acquire Longs Drugs Stores Corp., in a $2.9 billion deal. Longs operates 521 stores in the Western United States, with a heavy concentration in California. This will strengthen the 2006 acquisition by CVS of Sav-On Drugs, also primarily in California and now operating under the CVS brand. CVS will also enter the Hawaiian market which it did not previously operate. This deal will bring about $100 million a year in cost savings to the combined company.

Community Involvement

*The CVS Caremark Charitable Trust was established to provide funding for health care, education and community involvement initiatives in communities where CVS/pharmacy stores are located. [cite web
url=http://www.cvs.com/corpInfo/community/charitable_mission.html
title=CVS Caremark Charitable Trust
publisher=CVS Caremark
accessdate=2008-03-03]

*Since 1978, CVS Samaritan Vans have provided free roadside assistance to motorists and the community in numerous cities. They are "emergency response vehicles" that patrol select major freeways of Chicago, Charlotte, Cincinnati, Cleveland, Boston, Detroit, Indianapolis, Providence and Washington, D.C. in search of motorists in need. The drivers have a multitude of talents and certifications. They are Nationally Certified Auto Mechanics, State Certified Emergency Medical Technicians (EMTs) or Paramedics, and Nationally Certified Animal Control Officers. They are capable of making numerous on-site auto repairs, administering medical help, calming a tense situation or using their communication equipment to summon the state police or other assistance. Each year, the CVS Samaritan Vans travel about 600,000 miles, checking and assisting nearly 50,000 people, and responding to more than 61,000 roadway incidents.

*Played at the Rhode Island Country Club, the CVS Caremark Charity Classic was established to raise money for the support of non-profit agencies throughout New England. Since 1999, it has raised over $8 million for charity. The event has featured golf legends such as Arnold Palmer, Jack Nicklaus, Hale Irwin, and Gary Player along with today's top stars like David Duval, Chris DiMarco, Davis Love III, & Scott McCarron. [cite web
url=http://www.cvscharityclassic.com/
title=CVS Caremark Charity Classic
publisher=CVS Caremark
accessdate=2008-03-03]

Private label

CVS has an extensive assortment of various private labels and proprietary brands. In addition to CVS Brand, CVS also carries exclusive store brands under the names of Essence of Beauty, Gold Emblem, Absolutely Divine, Blade, Earth Essentials, and Life Fitness. CVS also holds exclusive contracts to sell proprietary brands such as Nuprin, Christophe, PreVentin-AT, 24/7, Skin Effects, and the European brand Lumene. A new exclusive Playskool line of baby care is also in CVS stores. CVS was also first to sell single-use digital cameras and camcorders from Pure Digital.

Controversies

Elensys

In 1998, the "Washington Post" reported that CVS Corporation appeared to be sharing prescription drug information with the Woburn-based marketing company, Elensys. According to the Post, Elensys received information on specific prescription drugs that individual CVS customers had purchased and used this information to send targeted direct mailings urging customers to renew prescriptions and promoting other products in which they might be interested. CVS and Elensys argued that there were no privacy issues because Elensys was acting solely as a contractor to CVS, and because the purpose of the mailings was to educate consumers. CVS claimed that it never shared customers' medical histories with Elensys (despite the Washington Post's indirect evidence that they had). George D. Lundberg, editor of the "Journal of the American Medical Association", called the practice "a gross invasion" of privacy. Following a firestorm of criticism and complaints by consumers, CVS discontinued the practice.

Boston prescriptions

During 2005 a rash of prescription mistakes came to light in some of CVS Corporation's Boston-area stores. An investigation confirmed 62 errors or quality problems going back to 2002. In February 2006, the state Board of Pharmacy announced that the non-profit Institute of Safe Medication Practices (ISMP) would monitor all Massachusetts stores for the next two years. [cite web
url=http://www.boston.com/business/healthcare/articles/2006/02/10/cvs_faces_pharmacy_reviews/
title=CVS faces pharmacy reviews
first=Christopher
last=Rowland
work=Boston Globe
date=2006-02-10
accessdate=2008-02-25]

Health & Medicare Fraud

In the late 1980s and early 1990s Caremark RX was involved in a number of health fraud and Medicare fraud scandals. [cite press release
url=http://www.usdoj.gov/opa/pr/Pre_96/June95/342.txt.html
title=Caremark to Pay $161 Million in Fraud and Kickback Cases
publisher= U.S. Department of Justice
accessdate=2008-02-25] [cite web
url=http://www.bizjournals.com/nashville/stories/2005/05/23/daily36.html
title=Report: Caremark, DOJ nearing settlement
work=Nashville Business Journal
date=2005-05-27
accessdate=2008-02-25]

Pharmaceutical Kickbacks

In 2005, Caremark RX paid $137.5 million to settle federal lawsuits filed by whistle-blowers that accused a company it acquired in 2003 of improper dealings with pharmaceutical manufacturers.

The lawsuits said that the acquired company, AdvancePCS, accepted kickbacks from drug makers to promote their products over those of rivals under contracts with government programs including the Federal Employees Health Benefit Program, the Mail Handlers Health Benefit Program and Medicare health maintenance plans.

There was no admission of wrongdoing by Caremark or AdvancePCS.

Deceptive Business Practices

In February 2008, CVS Caremark settled a large civil lawsuit for deceptive business practices. The Kaiser Family Foundation reported: [cite web
url=http://www.kaisernetwork.org/daily_reports/rep_index.cfm?DR_ID=50454
title=CVS Caremark Agrees To Pay $38.5M To Settle Allegations That It Did Not Pass on Rebates, Discounts to Patients, Employers
work=Kaiser Daily Health Policy Report
publisher=Kaiser Family Foundation
date=2008-02-15
accessdate=2008-02-25]

CVS Caremark has agreed to a a $38.5 million settlement in a multi-state civil deceptive-practices lawsuit against pharmacy benefit manager Caremark filed by 28 attorneys general, the "Chicago Tribune" reports.cite news
url=http://www.chicagotribune.com/business/chi--cvs-carmark-settlement-feb14,0,7852078.story
title=CVS Caremark settles deceptive-practices complaint for $38.5 million
first=James P.
last=Miller
work=Chicago Tribune
date=2008-02-14
accessdate=2008-02-25] The attorneys general, led by Lisa Madigan (D) of Illinois and Douglas Ganslar (D) of Maryland, allege that Caremark "engaged in deceptive business practices" by informing physicians that patients or health plans could save money if patients were switched to certain brand-name prescription drugs (Miller, "Chicago Tribune", 2/14).

However, the switch often saved patients and health plans only small amounts or increased their costs, while increasing Caremark's profits, Connecticut Attorney General Richard Blumenthal (D) said (Levick, "Hartford Courant", 2/15).cite news
url=http://www.courant.com/business/hc-caremark0215.artfeb15,0,3595370.story
title=Caremark Settles States' Probe
first=Diane
last=Levick
work=Hartford Courant
date=2008-02-15
accessdate=2008-02-25] Pennsylvania Attorney General Tom Corbett (R) said the PBM kept discounts and rebates that should have been passed on to employers and patients (Levy, "AP/San Francisco Chronicle", 2/14).cite news
url=http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2008/02/14/state/n134614S07.DTL
title=Caremark to pay $38M to settle drug-switching complaint
first=Marc
last=Levy
work=AP/San Francisco Chronicle
date=2008-02-14
accessdate=2008-02-25] In addition, Caremark did not "adequately inform doctors" of the full financial effect of the switch and did not disclose that the switch would increase Caremark's profits, the lawsuit alleges ("Chicago Tribune", 2/14).

...The settlement prohibits Caremark from requesting prescription drug switches in certain cases, such as when the cost to the patient would be higher with the new prescription drug; when the original prescription drug's patent will expire within six months; and when patients were switched from a similar prescription drug within the previous two years ("Hartford Courant", 2/15). Patients also have the ability to decline a switch from the prescribed treatment to the prescription offered by the pharmacy under the settlement, Madigan said ("Bloomberg News/Philadelphia Inquirer", 2/15).cite news
url=http://www.philly.com/philly/business/15659572.html
title=CVS to pay millions to settle drug-cost case
first=Andrew
last=Harris
work=Bloomberg News/Philadelphia Inquirer
date=2008-02-15
accessdate=2008-02-25]

References

External links

* [http://www.cvs.com/ CVS/Pharmacy e-commerce site]
* [http://www.cvscaremark.com/ CVS Caremark Corporation site]
* [http://www.caremark.com/ Caremark home page]
* [http://www.minuteclinic.com/ MinuteClinic home page]
* [http://www.forallthewaysyoucare.com/ For All The Ways You Care - CVS/Pharmacy Publicity]