CVS 2007 Annual Report Download - page 23

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19 I 2007 Annual Report
Approximately one-half of the drugstores are located in southern
California. The remaining drugstores are primarily located in our
existing markets in the Midwest and Southwest.
As of December 29, 2007, our retail pharmacy business
included 6,245 retail drugstores (of which 6,164 operated a
pharmacy) located in 40 states plus the District of Columbia
and operating under the CVS or CVS/pharmacy name, our
online retail website, CVS.com and 462 retail healthcare clinics
operating under the MinuteClinic name (of which 437 are
located in CVS/pharmacy stores).
Overview of Pharmacy Services Segment
Our pharmacy services business provides comprehensive prescrip-
tion benefit management services to over 2,000 health benefit
plans. These services include mail order pharmacy services,
specialty pharmacy services, plan design and administration,
formulary management and claims processing. Our customers
are primarily sponsors of health benefit plans (employers,
unions, government employee groups, insurance companies
and managed care organizations) and individuals located
throughout the United States. As a pharmacy benefits manager,
we manage the dispensing of pharmaceuticals through our mail
order pharmacies and our national network of 60,000 retail
pharmacies (which include CVS/pharmacy stores) to eligible
participants in benefit plans maintained by our customers and
utilize our information systems to perform safety checks, drug
interaction screening and generic substitution.
Our pharmacy services business also includes our specialty
pharmacy business. Our specialty pharmacies support individuals
that require complex and expensive drug therapies. Substantially
all of our mail service specialty pharmacies have been accredited
by the Joint Commission on Accreditation of Healthcare
Organizations. We also provide health management programs,
which include integrated disease management for 27 conditions
through our Accordant® health management offering. The
majority of these integrated programs are accredited by the
National Committee for Quality Assurance (the “NCQA”).
beneficiaries and flexible fulfillment options that afford plan
beneficiaries the opportunity to pick-up maintenance medications
in-store. While certain of these programs will commence in 2008,
many are in their formative stage and require significant informa-
tion system enhancements as well as changes to work processes.
Accordingly, there can be no assurances as to the timing of the
implementation of or the amount of incremental revenue
opportunities associated with these kinds of programs.
Our business is comprised of two operating segments: Retail
Pharmacy and Pharmacy Services.
Overview of Retail Pharmacy Segment
Our retail pharmacy business sells prescription drugs and a wide
assortment of general merchandise, including over-the-counter
drugs, beauty products and cosmetics, photo finishing, seasonal
merchandise, greeting cards and convenience foods through our
CVS/pharmacy retail stores and online through CVS.com.
CVS/pharmacy is one of the nation’s largest retail pharmacy
chains. With more than 40 years of dynamic growth in the
retail pharmacy industry, CVS/pharmacy generates almost 68%
of its revenue from the pharmacy business and is committed to
providing superior customer service by being the easiest phar-
macy retailer for customers to use. CVS/pharmacy fills more
than one of every seven retail prescriptions in America, and one
of every five in our own markets. Our proprietary loyalty card
program, ExtraCare, boasts over 50 million cardholders, making
it one of the largest and most successful retail loyalty programs
in the country.
In addition, we provide healthcare services through our
MinuteClinic® healthcare clinics. The clinics utilize nationally
recognized medical protocols to diagnose and treat minor health
conditions and are staffed by nurse practitioners and physician
assistants. We believe the clinics provide quality services that are
quick, affordable and convenient.
On June 2, 2006, we acquired certain assets and assumed
certain liabilities from Albertson’s, Inc. for $4.0 billion. The
assets acquired and the liabilities assumed included approximately
700 standalone drugstores and a distribution center located in La
Habra, California (collectively the “Standalone Drug Business”).