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57
2014 Annual Report
1 | Significant Accounting Policies
Description of business — CVS Health Corporation and its subsidiaries (the “Company”) is the largest integrated
pharmacy health care provider in the United States based upon revenues and prescriptions filled. The Company
currently has three reportable business segments, Pharmacy Services, Retail Pharmacy and Corporate, which are
described below.
Pharmacy Services Segment (the “PSS”)
—
The PSS provides a full range of pharmacy benefit management
services including mail order pharmacy services, specialty pharmacy and infusion services, plan design and admin-
istration, formulary management and claims processing. The Company’s 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.
As a pharmacy benefits manager, the PSS manages the dispensing of pharmaceuticals through the Company’s
mail order pharmacies and national network of more than 68,000 retail pharmacies, consisting of approximately
41,000 chain pharmacies and 27,000 independent pharmacies, to eligible members in the benefits plans maintained
by the Company’s clients and utilizes its information systems to perform, among other things, safety checks, drug
interaction screenings and brand to generic substitutions.
The PSS’ specialty pharmacies support individuals that require complex and expensive drug therapies. The specialty
pharmacy business includes mail order and retail specialty pharmacies that operate under the CVS/caremarkTM,
CarePlus CVS/pharmacy® and Navarro® Health Services names. In January 2014, the Company enhanced its
offerings of specialty infusion services and began offering enteral nutrition services through Coram LLC and its
subsidiaries (See Note 2, “Coram Acquisition”).
The PSS also provides health management programs, which include integrated disease management for 17 condi-
tions, through the Company’s Accordant® rare disease management offering.
In addition, through the Company’s SilverScript Insurance Company (“SilverScript”) subsidiary, the PSS is a national
provider of drug benefits to eligible beneficiaries under the federal government’s Medicare Part D program.
The PSS generates net revenues primarily by contracting with clients to provide prescription drugs to plan members.
Prescription drugs are dispensed by the mail order pharmacies, specialty pharmacies and national network of retail
pharmacies. Net revenues are also generated by providing additional services to clients, including administrative
services such as claims processing and formulary management, as well as health care related services such as
disease management.
The pharmacy services business operates under the CVS/caremarkTM Pharmacy Services, Caremark®, CVS/caremarkTM,
CarePlus CVS/pharmacy®, RxAmerica®, Accordant®, SilverScript®, NovoLogix®, Coram®, CVS/specialtyTM and
Navarro® Health Services names. As of December 31, 2014, the PSS operated 27 retail specialty pharmacy stores,
11 specialty mail order pharmacies and four mail order dispensing pharmacies, and 86 branches and six centers
of excellence for infusion and enteral services located in 40 states, Puerto Rico and the District of Columbia.
Retail Pharmacy Segment (the “RPS”) —
The RPS sells prescription drugs and a wide assortment of general
merchandise, including over-the-counter drugs, beauty products and cosmetics, photo finishing, seasonal
merchandise, greeting cards and convenience foods, through the Company’s CVS/pharmacy®, CVS®, Longs Drugs®,
Navarro® Discount Pharmacy and Drogaria Onofre® retail stores and online through CVS.com®, Navarro.comTM and
Onofre.com.brTM.
The RPS also provides health care services through its MinuteClinic® health care clinics. MinuteClinics are staffed by
nurse practitioners and physician assistants who utilize nationally recognized protocols to diagnose and treat minor
health conditions, perform health screenings, monitor chronic conditions and deliver vaccinations.
Notes to Consolidated Financial Statements