CVS 2007 Annual Report Download - page 40

36 I CVS Caremark

• The continued efforts of health maintenance organizations,
managed care organizations, pharmacy benefit management
companies and other third party payors to reduce prescription
drug costs and pharmacy reimbursement rates, particularly
with respect to generic pharmaceuticals;
• The possibility of client loss and/or the failure to win new
client business;
• The frequency and rate of introduction of successful new
prescription drugs as well as generic alternatives to existing
brand drugs;
• The effect on our Pharmacy Services business of a declining
margin environment attributable to increased competition in
the pharmacy benefit management industry and increased
client demands for lower prices, enhanced service offerings
and/or higher service levels;
• Risks related to our inability to earn and retain purchase
discounts and/or rebates from pharmaceutical manufacturers
at current levels;
• Risks regarding the impact of the new Medicare prescription
drug benefit on our business;
• Risks related to the change in industry pricing benchmarks that
could adversely affect our financial performance;
• Increased competition from other drugstore chains, supermarkets,
discount retailers, membership clubs and Internet companies, as
well as changes in consumer preferences or loyalties;
• Litigation, legislative and regulatory risks associated with our
business or the retail pharmacy business and/or pharmacy
benefit management industry generally;
• The risks relating to changes in laws and regulations, including
changes in accounting standards and taxation requirements
(including tax rate changes, new tax laws and revised tax
law interpretations);
• The risks relating to adverse developments in the healthcare or
pharmaceutical industry generally, including, but not limited to,
developments in any investigation related to the pharmaceutical
industry that may be conducted by any governmental authority;
• The strength of the economy in general or in the markets
we serve, which may impact consumer purchasing power,
preferences and/or spending patterns, our ability to attract,
hire and retain suitable pharmacists, management, and other
employees, our ability to establish effective advertising,
marketing and promotional programs, our ability to obtain
necessary financing on acceptable terms and our ability to
secure suitable store locations under acceptable terms; and
• Other risks and uncertainties detailed from time to time in our
filings with the Securities and Exchange Commission.
The foregoing list is not exhaustive. There can be no assurance
that the Company has correctly identified and appropriately
assessed all factors affecting its business. Additional risks and
uncertainties not presently known to the Company or that it
currently believes to be immaterial also may adversely impact the
Company. Should any risks and uncertainties develop into actual
events, these developments could have material adverse effects
on the Company’s business, financial condition and results of
operations. For these reasons, you are cautioned not to place
undue reliance on the Company’s forward-looking statements.