CVS 2014 Annual Report Download - page 24

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Management’s Discussion and Analysis
of Financial Condition and Results of Operations
22
CVS Health
The following discussion and analysis should be read in conjunction with our audited consolidated financial state-
ments and Cautionary Statement Concerning Forward-Looking Statements that are included in this Annual Report.
Overview of Our Business
CVS Health Corporation, together with its subsidiaries (collectively “CVS Health,” the “Company,” “we,” “our” or
“us”), is a pharmacy innovation company helping people on their path to better health. At the forefront of a changing
health care landscape, the Company has an unmatched suite of capabilities and the expertise needed to drive
innovations that will help shape the future of health.
We are currently the only integrated pharmacy health care company with the ability to impact consumers, payors,
and providers with innovative, channel-agnostic solutions. We have a deep understanding of their diverse needs
through our unique integrated model, and we are bringing them innovative solutions that help increase access to
quality care, deliver better health outcomes, and lower overall health care costs.
Through our 7,800 retail pharmacies, more than 900 walk-in medical clinics, a leading pharmacy benefits manager
(PBM) with more than 65 million plan members, and expanding specialty pharmacy services, we enable people,
businesses, and communities to manage health in more effective ways. We are delivering breakthrough products
and services, from advising patients on their medications at our CVS/pharmacy® locations, to introducing unique
programs to help control costs for our clients at CVS/caremarkTM, to innovating how care is delivered to our
patients with complex conditions through CVS/specialtyTM, or by expanding access to high-quality, low-cost care
at CVS/minuteclinicTM.
We currently have three reportable segments: Pharmacy Services, Retail Pharmacy and Corporate.
Overview of Our Pharmacy Services Segment
Our Pharmacy Services business generates revenue from a full range of PBM services, including plan design and
administration, formulary management, Medicare Part D services, mail order, specialty pharmacy and infusion
services, retail pharmacy network management services, prescription management systems, clinical services,
disease management services and medical spend management.
Our clients are primarily employers, insurance companies, unions, government employee groups, health plans,
Managed Medicaid plans and other sponsors of health benefit plans, and individuals throughout the United States.
A portion of covered lives, primarily within the Managed Medicaid, health plan and employer markets have access
to our services through public and private exchanges.
As a pharmacy benefits manager, we manage the dispensing of pharmaceuticals through our mail order pharmacies,
specialty pharmacies and national network of more than 68,000 retail pharmacies, consisting of approximately
41,000 chain pharmacies (which includes our CVS/pharmacy® stores) and 27,000 independent pharmacies, 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
pharmacy business includes mail order and retail specialty pharmacies that operate under the CVS/caremarkTM,
CarePlus CVS/pharmacy® and Navarro Health Services® 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. In January 2014, we
enhanced our offerings of specialty infusion services and began offering enteral nutrition services through Coram
LLC and its subsidiaries (collectively, “Coram”), which we acquired on January 16, 2014. We completed the roll out