CVS 2009 Annual Report Download - page 7

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Institute found that not taking medications as prescribed
leads to poorer health, more frequent hospitalization, a
higher risk of death, and as much as $290 billion annually
in increased medical costs across the U.S. health care
system. As the health care debate continues, one thing is
clear: We all have to find ways to make health care more
affordable. CVS Caremark is focusing on adherence to
impact the health of our customers and help take costs
out of the health care system.
In 2010, we expect adherence rates to be further
enhanced when our Consumer Engagement Engine (CEE)
goes live across our major channels during the second
half of the year. Powered by clinical rules, the CEE will
identify opportunities to promote better health outcomes
and to achieve costs savings across our unparalleled
points of contact.
The marketplace has enthusiastically embraced our
innovative Maintenance Choice® offering, which gives
eligible plan members access to 90-day mail pricing
whether they receive their prescriptions through the mail
or choose to pick them up at one of our approximately
7,000 conveniently located retail locations. This offering
eliminates the plan member disruption that many payors
face when they consider mandatory mail programs for
cost savings. Furthermore, clients that switched from a
voluntary mail program to Maintenance Choice saw their
generic dispensing rates (GDR) improve and achieved
savings of up to 6 percent of their pharmacy costs.
We currently serve 2,200 PBM clients, and more than
480 have signed up for Maintenance Choice to date. That
leaves significant upside as more existing and prospective
clients begin to appreciate its benefits.
WE ANTICIPATE HIGHER RETENTION LEVELS AND
MORE NEW BUSINESS OPPORTUNITIES FOR 2011
Obviously, we’ve faced some headwinds as well in our
PBM business. We won $11 billion dollars in new PBM
revenues over the past two years, but we also lost a similar
amount of existing business over this same time-frame as
a result of some unique circumstances affecting a handful
of accounts. Client renewals for 2011 are looking strong,
though, and I’m confident that retention will return to
Caremark’s historically high levels.
On the new business front, we took steps to reposition
our sales message to focus first on our industry-leading
PBM capabilities. We’re talking to clients about how we
are able to lower their costs and improve the plan member
experience. That is resonating well during the 2011 selling
season, and there are a significant number of large pros-
pects out to bid.
With Howard McLure’s retirement, I’m delighted that we
were able to hire Per Lofberg as our new PBM president.
Per, who joined us in January 2010, brings more than
30 years of experience in the health care and PBM indus-
tries. Formerly chairman of Merck-Medco Managed Care
LLC, which later became Medco Health Solutions, he
THOMAS M. RYAN
Chairman of the Board,
President, and
Chief Executive Officer
2009 Annual Report 3