CVS 2000 Annual Report Download - page 6

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markets in the U.S.—Phoenix, Arizona and Las Vegas, Nevada. We will announce our
intentions to enter several new markets each year, but at a pace that will allow us to sus-
tain our strong earnings growth progression.
Our 1997 acquisition of Revco D.S. Inc.and our 1998 acquisition of Arbor Drugs, Inc.
provided us with leadership in new markets, earnings accretion and incremental
upside potential. Both companies have been fully integrated—from a systems, people
and operational perspective—and are performing very well. Additionally, the busi-
nesses we acquired have become important sources of idea generation for further
enhancing the performance of the entire company.
CVS ProCare: #1 in a Fast-Growing Industry
One of our successful new channels,CVS ProCare,has grown to become an important
complement to our core CVS drugstore chain by enabling us to reach a new customer
segment with specialized pharmacy needs. We introduced our first CVS ProCare
apothecaries in 1999 and, during 2000, accelerated the expansion of this business
through our acquisition of Stadtlander Pharmacy, a leading specialty pharmacy com-
pany, and the addition of new ProCare locations.The acquisition of Stadtlander provided
CVS with the nation’s largest specialty retail/mail business. ProCare is now the #1 player
in the highly fragmented, rapidly growing, $14 billion market for patients
requiring complex and expensive drug therapies for long-
term health conditions—and the only specialty pharmacy
player with integrated retail and mail order services. We
expect the addition of Stadtlander to help propel ProCare to
a $2+ billion business within three to four years.
Our expansion of ProCare parallels, in many respects, the
growth we have achieved over the years with our PharmaCare
subsidiary. Designed to meet the needs of a specific customer
audience—managed care organizations—PharmaCare has
become one of the top pharmacy benefit management companies
(PBMs) in the nation,currently managing more than 9 million lives.
Through its proprietary systems and services, PharmaCare has
enabled the managed care community to provide its members with
the best healthcare in the most cost-effective manner, while assuring
CVS’ presence in this growing segment of the healthcare industry.
CVS.com: A Winning “Clicks and Mortar” Strategy
CVS.com has provided us with a new vehicle to enhance the convenience and
value we offer customers…on the corner, on the phone, and on the web. Through
unique partnerships with healthcare leaders, we are providing a level of healthcare
information and services unmatched by our competitors, backed by the trusted CVS
brand name. The strength of the “clicks and mortar” drugstore format is evidenced by
the fact that approximately 70% of CVS.com’s pharmacy customers choose in-store
We now operate 46 CVS ProCare specialty phar-
macies across the U.S., serving customers requiring
complex and expensive prescription therapies.
4
CVS Corporation