CVS 2008 Annual Report Download - page 23

2008 ANNUAL REPORT 19
Accordingly, over the long-term, there can be no assurance as
to the timing or amount of incremental revenues that can be
achieved with these kinds of programs.
We believe the breadth of capabilities resulting from the Caremark
Merger are resonating with our clients and contributed to our
success at renewing existing clients and obtaining a signifi cant
number of new clients in the 2008 selling season. Please see
Note 2 to the consolidated fi nancial statements for additional
information about the Caremark Merger.
OVERVIEW OF OUR PHARMACY SERVICES SEGMENT
Our Pharmacy Services business provides a full range of
prescription benefi t management (“PBM”) services including
mail order pharmacy services, specialty pharmacy services, plan
design and administration, formulary management and claims
processing. Our customers are primarily employers, insurance
companies, unions, government employee groups, managed
care organizations and other sponsors of health benefi t plans
and individuals throughout the United States.
As a pharmacy benefi ts manager, we manage the dispensing of
pharmaceuticals through our mail order pharmacies and national
network of approximately 60,000 retail pharmacies (which
include our CVS/pharmacy and Longs Drug stores) to eligible
participants in the benefi t plans maintained by our customers
and utilize our information systems to perform, among other
things, safety checks, drug interaction screenings and brand
to generic substitutions.
Our specialty pharmacies support individuals that require
complex and expensive drug therapies. Our specialty pharmacy
business includes mail order and retail specialty pharmacies that
operate under the Caremark® and CarePlus CVS/pharmacy™
names. Substantially all of our mail service specialty pharmacies
have been accredited by The Joint Commission.
We also provide health management programs, which include
integrated disease management for 27 conditions, through our
Accordant Care™ health management offering. The majority
of these integrated programs are accredited by the National
Committee for Quality Assurance.
In addition, through our SilverScript Insurance Company
(“SilverScript”) and Accendo Insurance Company (“Accendo”)
subsidiaries, we are a national provider of drug benefi ts to eligible
benefi ciaries under the Federal Government’s Medicare Part D
program. The Company acquired Accendo in the Longs Acquisition
(defi ned later in this document), and, effective January 1, 2009,
Accendo replaced RxAmerica as the Medicare-approved
prescription drug plan for the RxAmerica Medicare Part D drug
benefi t plans.
Our pharmacy services business generates net revenues primarily
by contracting with clients to provide prescription drugs to plan
participants. Prescription drugs are dispensed by our mail order
pharmacies, specialty pharmacies and national network of
retail pharmacies. Net revenues are also generated by providing
additional services to clients, including administrative services
such as claims processing and formulary management, as well
as health care related services such as disease management.
The pharmacy services business operates under the Caremark
Pharmacy Services®, Caremark®, CVS CaremarkTM, CarePlus
CVS/pharmacyTM, CarePlusTM, RxAmerica®, Accordant Care™
and TheraCom® names. As of December 31, 2008, the Pharmacy
Services Segment operated 58 retail specialty pharmacy stores,
19 specialty mail order pharmacies and 7 mail service pharmacies
located in 26 states, Puerto Rico and the District of Columbia.
OVERVIEW OF OUR 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 fi nishing, seasonal
merchandise, greeting cards and convenience foods through
our CVS/pharmacy and Longs Drug retail stores and online
through CVS.com.
CVS/pharmacy is the nation’s largest retail pharmacy chain.
With more than 45 years of dynamic growth in the retail
pharmacy industry, the Retail Pharmacy Segment generates
approximately 68% of its revenue from prescription sales and
is committed to providing superior customer service by being
the easiest pharmacy retailer for customers to use.
CVS/pharmacy fi lls more than one out of every six retail prescrip-
tions in the United States, and more than one out of every fi ve
prescriptions in the markets we serve.
Our retail pharmacy business also provides health care services
through our MinuteClinic health care clinics. Our health care
clinics utilize nationally recognized medical protocols to diagnose
and treat minor health conditions and are staffed by nurse
practitioners and physician assistants. We believe our clinics
provide quality services that are quick, affordable and convenient.
Our proprietary loyalty card program, ExtraCare®, has well over
50 million active cardholders, making it one of the largest and
most successful retail loyalty card programs in the country.
As of December 31, 2008, our retail pharmacy business included
6,923 retail drugstores (of which 6,857 operated a pharmacy)
located in 41 states and the District of Columbia operating
primarily under the CVS/pharmacy® or Longs Drug® names, our
online retail website, CVS.com® and 560 retail health care clinics
operating under the MinuteClinic® name (of which 534 were
located in CVS/pharmacy stores).