Profile: CVS Caremark Corporation (CVS)

CVS Caremark Corporation (CVS Caremark) is a provider of prescriptions and related healthcare services in the United States. It is a pharmacy services company and drives value for its customers through its approximately 6,900 CVS/pharmacy and Longs Drug retail stores; CVS Caremark’s 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. The Company operates in two business segments: Pharmacy Services and Retail Pharmacy. October 20, 2008, CVS Caremark acquired Longs Drug Stores Corporation, which includes 529 retail drug stores (the Longs Drug Stores) and RxAmerica LLC (RxAmerica), which provides pharmacy benefit management services, and certain other related assets.

During the year ended December 31, 2008, the Company introduced Proactive Pharmacy Care, an approach to engaging plan participants in behaviors that can help lower costs, improve health and save lives. The Proactive Pharmacy Care programs include: Maintenance Choice (a fulfillment option that affords eligible plan participants the choice of picking up their 90-day supply of maintenance medications at any CVS/pharmacy store or obtaining them through mail order in either case at the cost of mail for both the payer and the plan participant); Bridge Supply (which enables eligible plan participants to avoid gaps in care while waiting for their medications to arrive in the mail by obtaining a bridge supply of their prescriptions at any CVS/pharmacy store at no additional charge), and a ExtraCare Health Card program (which offers discounts to eligible plan participants on certain Flexible Spending Account-eligible and over-the-counter health care products sold in any of its CVS/pharmacy stores).

Pharmacy Services

The Pharmacy Services business provides a range of prescription benefit management (PBM) services, including mail order pharmacy services, specialty pharmacy services, plan design and administration, formulary management and claims processing. Its customers are primarily employers, insurance companies, unions, government employee groups, managed care organizations and other sponsors of health benefit plans and individuals throughout the United States. In addition, through its SilverScript Insurance Company (SilverScript) and Accendo Insurance Company (Accendo) subsidiaries, the Company is a national provider of drug benefits to eligible beneficiaries under the Federal Government’s Medicare Part D program. The pharmacy services business operates under the Caremark Pharmacy Services, Caremark, CVS Caremark, CarePlus CVS/pharmacy, CarePlus, RxAmerica, AccordantCare and TheraCom names. As of December 31, 2008, the Pharmacy Services segment operated 58 retail specialty pharmacy stores, 19 specialty mail order pharmacies and seven mail service pharmacies located in 26 states, Puerto Rico and the District of Columbia.

The Company operates seven automated mail service pharmacies in the continental United States, including one located in Largo, Florida. It also operates a network of smaller mail service specialty pharmacies. In addition, the Company operates a United States Food and Drug Administration (FDA) regulated repackaging facility in which it repackages certain drugs into the most common prescription amounts dispensed from its automated mail service pharmacies. The Company’s specialty pharmacies comprise of 19 specialty mail order pharmacies located throughout the United States and are used for delivery of advanced medications to individuals with chronic or genetic diseases and disorders. One of its mail service specialty pharmacies, TheraCom, provides new product launch services for manufacturers of specialty drugs.

The Company operates a limited number of small pharmacies located at client sites under the CarePlus CVS/pharmacy, CVS/pharmacy or CarePlus name, which provide participants with an alternative for filling their prescriptions. The Company maintains a national network of approximately 60,000 retail pharmacies, including CVS/pharmacy and Longs Drug stores. Its AccordantCare health management programs include integrated disease management, which includes 27 diseases, such as asthma, coronary artery disease, congestive heart failure, diabetes, hemophilia, rheumatoid arthritis and multiple sclerosis.

Retail Pharmacy

As of December 31, 2008, the Retail Pharmacy Segment included 6,923 retail drugstores, of which 6,857 operated a pharmacy, its online retail Website, CVS.com and its retail health care clinics. The retail drugstores are located in 41 states and the District of Columbia operating primarily under the CVS/pharmacy, or Longs Drug names. CVS/pharmacy stores sell prescription drugs and a wide assortment of general merchandise, which it refers to as front store products. As of December 31, 2008, it operated 560 retail health care clinics in 27 states under the MinuteClinic name, of which 534 were located within CVS/pharmacy stores. The CVS/pharmacy store sells prescription drugs and a wide assortment of nationally advertised brand name and private label merchandise. Its front store categories include over-the-counter drugs, beauty products and cosmetics, film and photo finishing services, seasonal merchandise, greeting cards and convenience foods.

The Company competes with Medco Health Solutions, Inc., Express Scripts, Inc., UnitedHealthcare, Wellpoint, Aetna and CIGNA.