CVS 2012 Annual Report Download - page 24

Management’s Discussion and Analysis of
Financial Condition and Results of Operations
CVS CAREMARK 2012 ANNUAL REPORT
22
The following discussion and analysis should be read in conjunction with our audited consolidated financial statements
and Cautionary Statement Concerning Forward-Looking Statements that are included in this Annual Report.
Overview of Our Business
CVS Caremark Corporation (“CVS Caremark”, the “Company”, “we” or “us”), together with its subsidiaries, is the largest
integrated pharmacy health care provider in the United States. We are uniquely positioned to deliver significant benefits to
health plan sponsors through effective cost management solutions and innovative programs that engage plan members
and promote healthier and more cost-effective behaviors. Our integrated pharmacy services model enhances our ability
to offer plan members and consumers expanded choice, greater access and more personalized services to help them on
their path to better health. We effectively manage pharmaceutical costs and improve health care outcomes through our
pharmacy benefit management (“PBM”), mail order and specialty pharmacy division, CVS Caremark® Pharmacy Services
(“Caremark”); our more than 7,400 CVS/pharmacy® retail stores; our retail-based health clinic subsidiary, MinuteClinic® and
our online retail pharmacy, CVS.com®.
We currently have three reportable segments: Pharmacy Services, Retail Pharmacy and Corporate.
Overview of Our Pharmacy Services Segment
Our Pharmacy Services business provides a full range of PBM services, including mail order and specialty pharmacy
services, plan design and administration, formulary management, discounted drug purchase arrangements, Medicare
Part D services, retail pharmacy network management services, prescription management systems, clinical services and
disease management services.
Our clients are primarily employers, insurance companies, unions, government employee groups, managed care organiza-
tions and other sponsors of health benefit plans and individuals throughout the United States.
As a pharmacy benefits manager, we manage the dispensing of pharmaceuticals through our mail order pharmacies and
national network of approximately 67,000 retail pharmacies (which include our CVS/pharmacy stores) to eligible members
in the benefit plans maintained by our clients 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 phar-
macy business includes mail order and retail specialty pharmacies that operate under the CVS Caremark® and CarePlus
CVS/pharmacy® names. Substantially all of our mail service specialty pharmacies have been accredited by The Joint
Commission, which is an independent, not-for-profit organization that accredits and certifies health care organizations
and programs in the United States.
We also provide health management programs, which include integrated disease management for 17 conditions, through
our Accordant® 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 Pennsylvania Life Insurance Company
(“Pennsylvania Life”) subsidiaries, we are a national provider of drug benefits to eligible beneficiaries under the Federal
Government’s Medicare Part D program. We currently provide Medicare Part D plan benefits to approximately 3.9 million
beneficiaries through the above mentioned insurance companies.