CVS 2012 Annual Report Download - page 50

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CVS CAREMARK 2012 ANNUAL REPORT
48
Management’s Discussion and Analysis of
Financial Condition and Results of Operations
•฀ ฀An฀extremely฀competitive฀business฀environment,฀including฀the฀uncertain฀impact฀of฀increased฀consolidation฀in฀the฀PBM฀
industry, uncertainty concerning the ability of our retail pharmacy business to secure and maintain contractual relation-
ships with PBMs and other payors on acceptable terms, uncertainty concerning the ability of our PBM business to
secure and maintain competitive access, pricing and other contract terms from retail network pharmacies in an environ-
ment where some PBM clients are willing to consider adopting narrow or more restricted retail pharmacy networks.
•฀ ฀Uncertainty฀relating฀to฀the฀effect฀on฀our฀net฀revenues,฀gross฀prot,฀marketing฀and฀other฀operating฀expenses฀and฀cash฀
flows over time if we are unable to retain the business we have gained as a result of the Express Scripts and Walgreens
contractual impasse to the extent anticipated.
•฀ ฀Risks฀relating฀to฀our฀ability฀to฀secure฀timely฀and฀sufcient฀access฀to฀the฀products฀we฀sell฀from฀our฀domestic฀and/or฀
international suppliers.
•฀ ฀Reform฀of฀the฀U.S.฀health฀care฀system,฀including฀ongoing฀implementation฀of฀the฀Patient฀Protection฀and฀Affordable฀Care฀
Act, continuing legislative efforts, regulatory changes and judicial interpretations impacting our health care system and
the possibility of shifting political and legislative priorities related to reform of the health care system in the future.
•฀ ฀Risks฀relating฀to฀our฀failure฀to฀properly฀maintain฀our฀information฀technology฀systems,฀our฀information฀security฀systems฀
and our infrastructure to support our business and to protect the privacy and security of sensitive customer and busi-
ness information.
•฀ ฀Risks฀related฀to฀compliance฀with฀a฀broad฀and฀complex฀regulatory฀framework,฀including฀compliance฀with฀new฀and฀
existing federal, state and local laws and regulations relating to health care, accounting standards, corporate securities,
tax, environmental and other laws and regulations affecting our business.
•฀ ฀Risks฀related฀to฀litigation,฀government฀investigations฀and฀other฀legal฀proceedings฀as฀they฀relate฀to฀our฀business,฀the฀
pharmacy services, retail pharmacy or retail clinic industries or to the health care industry generally.
•฀ ฀Other฀risks฀and฀uncertainties฀detailed฀from฀time฀to฀time฀in฀our฀lings฀with฀the฀SEC.
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 a material adverse effect on the Company’s business, financial condi-
tion and results of operations. For these reasons, you are cautioned not to place undue reliance on the Company’s
forward-looking statements.