CVS 2005 Annual Report Download - page 5

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3
05
04
03
$0.133
$0.115
$0.145
Dividends Declared
hard to position ourselves as a key information source. More than 15,000 CVS pharmacists have undergone extensive training to
help seniors navigate the variety of options available to them. We’ve formed marketing alliances with three of the nation’s leading
managed care organizations: UnitedHealth Group, through its Ovations business unit, Aetna, and Humana. We’ve also hosted free
educational seminars and set up Medicare Information Centers in stores across the country. As a result, we are already seeing new
customers in our stores.
With the industry’s leading retail presence and our PBM, we are in an excellent position to benefit from Medicare Part D. Our
PharmaCare subsidiary has grown into the nation’s fourth-largest, full-service PBM since its launch in 1994. An attractive business,
it has low capital requirements and high return characteristics. PharmaCare has focused from the outset on providing clients with
high-quality, low-cost solutions. It has also been at the leading edge of providing an integrated PBM/specialty pharmacy offering.
In addition to its significant mail order pharmacy business, PharmaCare operates specialty stores across the country as well as a
state-of-the-art specialty mail order facility. During 2005, PharmaCare announced a strategic alliance with Universal American
Financial Corp., a leading health insurance company, under which PharmaCare will provide a full array of PBM services to Universal
American-sponsored Medicare prescription plans.
Gaining share in all key, front-store categories
CVS gained share in the front of the store in all key categories, including health, beauty, vitamins, greeting cards, and general
merchandise, while also increasing sales of private label products. Our ExtraCare®loyalty card has become a powerful tool, and
customers tell us that they love the benefits. Impressively, they use the card for approximately 60 percent of front-store transactions.
A laser focus on customer service is at the heart of our front-store strategy. Along with our loyalty program, new proprietary and
exclusive products, and smarter promotions, our focus on making things “CVS easy®” for customers is driving our growth. Our
customer research tells us that our service profile has strengthened. We are earning high marks for shopability, value, hours of
operation, being in-stock, and overall customer service. Among our latest “CVS easy” initiatives, we’ve teamed up with MinuteClinic
to offer in-store treatment for common family ailments through certified nurse practitioners and physician’s assistants. As of
February 2006, approximately 50 CVS/pharmacy stores included these independently operated clinics, and we expect that number
to rise as the year progresses. Early reports indicate that customers enjoy the convenience.
Our ExtraCare®loyalty card has
become a powerful tool, and
customers tell us that they love
the benefits.