Profile: CVS Caremark Corp (CVS.N)
9 Dec 2013
CVS Caremark Corporation (CVS Caremark), together with its subsidiaries, is a pharmacy health care provider in the United States. CVS Caremark provides pharmacy services through its pharmacy benefit management (PBM), mail order and specialty pharmacy division, CVS Caremark Pharmacy Services; approximately 7,300 CVS/pharmacy retail stores; retail-based health clinic subsidiary, MinuteClinic, and its online retail pharmacy, CVS.com. The Company operates in three business segments: Pharmacy Services, Retail Pharmacy and Corporate. Its corporate segment provides management and administrative services to support the overall operations of the Company. The Corporate segment consists of certain aspects of its executive management, corporate relations, legal, compliance, human resources, corporate information technology and finance departments. On April 29, 2011, the Company acquired the Medicare prescription drug business of Universal American Corp. (the UAM Medicare Part D Business). In April 2012, Health Net, Inc.’s subsidiary, Health Net Life Insurance Company, sold its Medicare stand-alone Prescription Drug Plan (Medicare PDP) business to a subsidiary of CVS Caremark. In February 2013, it bought Drogaria Onofre.
Pharmacy Services Segment
The Pharmacy Services segment provides a range of PBM services. CVS Caremark’s clients include 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 the Company’s SilverScript Insurance Company (SilverScript), Accendo Insurance Company (Accendo) and Pennsylvania Life Insurance Company (Pennsylvania Life) subsidiaries, it is a national provider of drug benefits to eligible beneficiaries under the Federal Government’s Medicare Part D program. As of December 31, 2011, the Pharmacy Services business operated under the CVS Caremark Pharmacy Services, Caremark, CVS Caremark, CarePlus CVS/pharmacy, CarePlus, RxAmerica and Accordant names. As of December 31, 2011, the Pharmacy Services segment operated 31 retail specialty pharmacy stores, 12 specialty mail order pharmacies and four mail service pharmacies located in 22 states, the District of Columbia and Puerto Rico.
The Company’s PBM services include plan design and administration, formulary management, discounted drug purchase arrangements, Medicare Part D services, mail order and specialty pharmacy services, retail pharmacy network management services, prescription management systems, clinical services, disease management services and pharmacogenomics. Its clients sponsor pharmacy benefit plans that facilitate the ability of eligible members in these plans to receive prescribed medications. It assists the clients in designing pharmacy benefit plans that minimize the costs to the client while prioritizing the welfare and safety of the clients’ members. It utilizes a panel of doctors, pharmacists and other medical, referred to as Pharmacy and Therapeutics Committee, to select drugs. Its drug lists provide recommended products in numerous drug classes. It also receives various purchase discounts under its wholesale contracts, which include retroactive discounts, or rebates. It offers Medicare Part D pharmacy benefits through its subsidiaries, SilverScript, Accendo and Pennsylvania Life.
As of December 31, 2011, the Company operated four automated mail service pharmacies in the United States. It also operates a network of smaller mail service specialty pharmacies. As of December 31, 2011, its specialty pharmacies were comprised of 12 specialty mail order pharmacies located throughout the United States that are used for delivery of advanced medications to individuals with chronic or genetic diseases and disorders. As of December 31, 2011, the Company operated a network of 31 retail specialty pharmacy stores, which operate under the CarePlus CVS/pharmacy name. These stores average 2,000 square feet in size and sell prescription drugs and a limited assortment of front store items, such as alternative medications, homeopathic remedies and vitamins.
The Company maintains a national network of approximately 65,000 retail pharmacies, including CVS/pharmacy stores. It offers multiple clinical programs and services to help clients manage overall pharmacy and health care costs. Its Accordant health management programs include rare disease management programs, which cover diseases, such as rheumatoid arthritis, Parkinson’s disease, seizure disorders and multiple sclerosis. It owns a majority interest in Generation Health, Inc., a genetic benefit management company, that offers pharmacogenomic clinical and testing services to its PBM clients. During the year ended December 31, 2011, its PBM filled or managed approximately 775 million prescriptions.
Retail Pharmacy Segment
As of December 31, 2011, the Retail Pharmacy segment included 7,327 retail drugstores, of which 7,271 operated a pharmacy, its online retail pharmacy Website, CVS.com, 30 onsite pharmacy stores and its retail health care clinics. The retail drugstores are located in 41 states, Puerto Rico and the District of Columbia operating primarily under the CVS/pharmacy name. As of December 31, 2011, CVS Caremark operated in 92 United States drugstore markets. CVS/pharmacy stores sell prescription drugs and a range of general merchandise, front store products. Existing retail stores range in size from approximately 5,000 to 25,000 square feet, although most new stores range in size from approximately 8,000 to 13,000 square feet and include a drive-thru pharmacy. During 2011, it filled approximately 658 million retail prescriptions, or approximately 20% of the United States retail pharmacy market. As of December 31, 2011, the Company operated 657 retail health care clinics in 25 states and the District of Columbia under the MinuteClinic name, of which 648 were located within CVS/pharmacy stores. Its products and services include pharmacy, front store, minuteclinic and onsite pharmacies.
Front store categories include over-the-counter drugs, beauty products and cosmetics, film and photo finishing services, seasonal merchandise, greeting cards and convenience foods. A key component of the Company’s front store is its ExtraCare card program. The Company carried over 4,400 CVS/pharmacy and brand products, which accounted for approximately 18% of its front store revenues during 2011. As of December 31, 2011, it operated 657 MinuteClinic locations in 25 states and the District of Columbia; of which 648 were located in CVS/pharmacy stores. It also operates a limited number of small pharmacies located at client sites under the CarePlus CVS/pharmacy, CarePlus or CVS/pharmacy name, which provide certain health plan members and customers with a convenient alternative for filling their prescriptions. During 2011, it opened 161 new retail pharmacy stores, relocated 86 stores and closed 16 stores.
The Company competes with Express Scripts, Inc., Medco Health Solutions, Inc., United Healthcare and CIGNA.
CVS Caremark Corp
ONE CVS DR.
WOONSOCKET RI 02895