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19
2013 Annual Report
January 2015. With the Aetna commercial business
now on our platform, Aetna has the ability to market
CVS Caremark’s integrated offerings as well.
Back in 2010, we undertook an extensive PBM stream-
lining initiative that included consolidating our facilities,
redesigning our pharmacy front-end processes, open-
ing two new automated mail order pharmacies, and
consolidating our claims adjudication systems. These
programs are on track to deliver cumulative savings of
more than $1 billion by the end of 2015.
Our comprehensive specialty offering helps improve
outcomes and lower costs
Specialty pharmacy continues to grow at a much faster
rate than the pharmacy industry overall, with industry
projections for this market to grow from $92 billion in
2012 to $235 billion by 2018. By that time, specialty
pharmaceuticals are expected to account for 50 percent
of the total spent on drugs in the United States. CVS
Caremark’s specialty business is growing faster than
the overall market, with specialty revenues expected to
reach $26 billion in 2014.
Many believe that specialty medications represent the
pinnacle of achievement in biologic science and have
revolutionized the treatment of a host of debilitating and
life-threatening illnesses. At the same time, managing
these expensive agents and the specialty patient popula-
tion brings its own share of complexities, and our clients
are clamoring for help in controlling the rapidly rising costs.
CVS Caremark has assembled what we believe to be
the most complete and coordinated solution in our industry
to address the needs of specialty patients and payors.
Our solutions include comprehensive trend management
in which CVS Caremark aggressively manages all drugs
irrespective of route of administration or site of service,
or whether a drug is covered by the medical or phar-
macy benefit. Our acquisition of the NovoLogix technol-
ogy gives us automated medical claims management
capabilities that no other large PBM offers.
Our differentiated clinical care model integrates our
Accordant® rare disease care management services to
enhance care and reduce costs. Our clinical model can
reduce total health care spending for specialty patients
by as much as 11 percent. Through our Specialty
Connect™ integrated delivery option, patients also have
the flexibility to receive their drugs by mail or at one of
our stores. This program is analogous to Maintenance
Choice. Our pilot launch of Specialty Connect has
revealed that half of specialty patients prefer to pick up
their drugs at a CVS/pharmacy location and that this
program is helping to drive improved adherence rates.
Finally, our acquisition of Coram has significantly
expanded our capabilities in the infusion market. Coram
serves 165,000 patients annually through its 85 branch
locations and 600 home infusion nurses around the
country. Coram also complements our existing specialty
competencies, creating cross-selling opportunities and
making us a compelling option for narrow networks that
are trying to improve outcomes while driving down costs.
CVS/pharmacy® stores are in the right growth
markets and outperforming competitors on
medication adherence
Our retail business posted solid results in 2013,
especially given the continued evidence of a cautious
consumer. Same-store sales grew by 1.7 percent
overall, with the pharmacy up 2.6 percent and the front
of the store down 0.5 percent.
Our stores now command a 21.3 percent share of the
U.S. retail prescription drug market, and we are poised
to capitalize on health care reform over the next few
years. With 30 million Americans expected to gain health
care coverage through the public exchanges and the
expansion of Medicaid, we believe that we are well-posi-
tioned with the power and reach of our brand, as well as
the trusting relationships that exist between our 23,000
pharmacists and millions of patients.
Turning to our real estate program, we opened 247 new
or relocated stores in 2013. Factoring in closings, net
units increased by 156 stores. That equates to 2.4 per-
cent retail square footage growth for the year, in line with
our annual goal. We expect to continue to expand our
retail square footage at roughly the same pace going
forward. Looking at just the top 10 states that are expect-
ed to see the largest increases in their insurance rolls –
California, Texas, and Florida topping the list – we already
have strong market positions with plans to expand in
counties where the greatest opportunities exist.