CVS Corporation

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CVS/pharmacy

Type	Subsidiary of CVS/Caremark Corporation
Founded	1963
Headquarters
Products	Retail - Pharmacy
Revenue	$37.006 billion USD (2005)
Operating income	$2.019 billion USD (2005)
Net income	$1.210 billion USD (2005)
Employees	80,000 (2005)
Slogan	Expect something extra
Website	www.cvs.com

CVS/pharmacy is a pharmacy and convenience store chain in the United States. CVS is also the largest pharmacy chain in the United States, based on the number of stores.

CVS operates stores under the name of CVS/pharmacy, though these are often simply called CVS. It also operates a specialty drugs and benefits management division called Pharmacare. Recently, they acquired MinuteClinic as a wholely-owned subsidiary. It operates basic-care clinics, staffed by Nurse-Practitioners and Physician Assistants. Most of these clinics are in CVS stores.

While CVS is incorporated in Delaware, and is based in Woonsocket, Rhode Island, it was founded in Lowell, Massachusetts in 1963. CVS's chief competitor, Walgreens, has fewer stores, but generates higher sales than CVS.

CVS Corporation merged with Caremark RX in March of 2007. The new company is called CVS/Caremark Corporation and it is headquartered in Woonsocket, Rhode Island.

1 Name
2 Acquisitions and growth
3 Private label
4 Controversies
5 External links
6 References

[edit] Name

CVS Corporation used to be a subsidiary of Melville Corporation until Melville changed its name to CVS in 1996.

The acronym once stood for "Consumer Value Stores," but CEO Tom Ryan has said he now considers it to stand for "Customers, Value, and Service."

During the company's days as a regional chain in the Northeastern U.S., many of CVS's stores did not include pharmacies. These stores were simply called "CVS," while the ones with pharmacies were called "CVS/pharmacy." Today, the company no longer builds new stores without pharmacies, and is gradually phasing out the old convenience store-type shops that remain in New England, New York, Washington, D.C., and shopping malls.

[edit] Acquisitions and growth

One of the many urban CVS stores in Atlanta, Georgia.

A CVS/pharmacy (Store #6240) in Southside Place, Texas that was formerly an Eckerd.

In 1964, CVS had 17 stores that sell primarily health and beauty products.

In 1967, CVS began operation of its first stores with pharmacy departments, opening locations in Warwick and Cumberland, RI.

By 1970, CVS operated 100 stores in New England and the Northeast.

In 1972, CVS nearly doubled in size with its acquisition of 84 Clinton Drug and Discount Stores. The purchase introduced CVS to the Midwest with stores in Indiana.

In 1977, CVS acquired the 36-store New Jersey-based Mack Drug chain.

In 1980, CVS became the 15th largest pharmacy chain in the U.S. with 408 stores and $414 million in sales.

In 1988, CVS celebrated its 25th anniversary, finishing the year with nearly 750 stores and sales of about $1.6 billion.

In 1990, CVS acquired the 500-store Peoples Drug chain, which established the company in new mid-Atlantic markets including Washington, D.C., Pennsylvania, Maryland, and Virginia. The newly acquired stores were converted to CVS stores.

In 1993, CVS withdraws from the Southern California market.

In 1994, CVS launched PharmaCare, a pharmacy benefit management (PBM) company providing a wide range of services to employers, managed care organizations, insurance companies, unions, and government agencies.

Until 1996, CVS was a division of Melville Corporation. During that year, Melville divested its other subsidiary retail chains, which included Linens 'N Things, KB Toys, and Marshalls, and changed its name to CVS Corporation. Formerly traded as MVL on the New York Stock Exchange, the company now trades under the symbol CVS.

In 1997, CVS more than doubled its 1,400 stores after purchasing the 2,500-store Revco chain. The acquisition brought CVS into the Ohio Valley and Southeastern U.S.; previously, the company's footprint had not been south of Washington, D.C.. CVS was able to afford so large a purchase because of its recent Melville divesture.

Also in 1997, CVS ProCare was established as a specialty pharmacy subsidiary of CVS.

In 1998, CVS acquired 207 stores from Arbor Drugs, bringing its store total to 4,100 across 24 states. The transaction gave CVS its first stores in Michigan and an instant lead in the highly competitive Detroit market.

In 1999, CVS acquired Soma.com, the first online pharmacy, and renamed it CVS.com. This allowed CVS to become the first fully-integrated online and brick-and-mortar pharmacy.

In 2000, CVS acquired Stadtlander pharmacy, making CVS ProCare the largest specialty pharmacy in the U.S.

In 2004, CVS purchased 1,268 Eckerd drug stores, as well as Eckerd Health Services, a PBM/Mail-order pharmacy business, from J.C. Penney. Most of the former Eckerd stores, which were converted to CVS stores by June, are located in Florida and Texas. Because J.C. Penney credit cards were accepted at Eckerd locations, CVS continues to accept them as well.

Also in 2004, CVS ProCare became part of PharmaCare, and all ProCare stores were re-branded as PharmaCare.

On January 23, 2006, CVS announced that it had agreed to acquire the freestanding drug store operations of supermarket chain Albertsons. The deal included the acquisition of 700 drug stores trading under the Osco Drug and Sav-On Drugs banners, mostly in the Midwest and Southwestern United States with primary concentration of stores in Southern California and Chicagoland; and was formally completed on June 2, 2006. Transition of Sav-On and Osco stores to the CVS brand began shortly thereafter, and was completed by December 2006. CVS now dominates the Southern California market. Also included were Albertsons Health'n'Home (now CVS Home Health) durable medical equipment stores. Approximately 28 CVS Home Health locations are present in Arizona, California and the Kansas City area; representing CVS's first venture into the specialized DME market.

CVS had previously operated stores in southern California, but completely withdrew from the market in 1993. CVS sold virtually all of the locations to Sav-On's then owner American Stores, who operated them under the name American Drug Stores. As a result, many of the stores CVS gained in January 2006 had been the stores it owned prior to 1993. Before their re-acquisition, the stores were operated under the name Sav-On Express (the Express name was used to help customers identify those stores that did not carry all the lines of merchandise as compared to the larger, traditional Sav-On Drugs locations). CVS now operates over 6,200 stores in 43 states and the District of Columbia. [1]

On July 13, 2006, CVS announced that it had entered into a definitive agreement to acquire Minneapolis-based MinuteClinic, the pioneer and largest provider of retail-based health clinics in the U.S. MinuteClinic operates as a wholly-owned subsidiary of CVS Corporation. MinuteClinic health care centers are staffed by board-certified nurse practitioners and physician assistants who are trained to diagnose and treat common family illnesses such as strep throat and ear, eye, sinus, bladder and bronchial infections, and provide prescriptions when clinically appropriate. MinuteClinic also offers common vaccinations, such as flu shots, tetanus, and Hepatitis A & B. The clinics are supported by physicians who collaborate with the nurse practitioners to assure the highest quality of care. As of December 14, 2006, there are 136 MinuteClinics in 18 states, most of which are within CVS/pharmacy locations.

On November 1, 2006, CVS announced that it was entering into a merger agreement with Nashville-based Caremark Rx Inc., a pharmacy benefits manager. The new company is called CVS/Caremark Corp. and the corporate headquarters remains in Woonsocket, RI. The new pharmacy services business, including the combined pharmacy benefits management (PBM), specialty pharmacy, and disease management businesses, is headquartered in Nashville, TN. The new CVS/Caremark Corporation is expected to achieve about $75 billion in yearly revenue for 2007. The merger was formally completed on March 22, 2007. Tom Ryan, CVS's Chairman and CEO, remains president and CEO of the combined company, while Caremark's President and CEO, Mac Crawford, is Chairman of the Board.

[edit] Private label

CVS has an extensive assortment of various private labels and proprietary brands. In addition to CVS Brand, CVS also carries exclusive store brands under the names of Essence of Beauty, Gold Emblem, and Life Fitness. CVS also holds exclusive contracts to sell propriety brands such as Nuprin, Christophe, PreVentin-AT, Skin Effects, and the Scandinavian brand Lumene. A new exclusive Playskool line of baby care is also in CVS stores. CVS was also first to sell single-use digital cameras and camcorders from Pure Digital.

[edit] Controversies

A CVS location (#7606) in Austin, Texas, across from the University of Texas at Austin

[edit] Elensys

In 1998, the Washington Post reported that CVS appeared to be sharing prescription drug information with the Woburn-based marketing company, Elensys. According to the Post, Elensys received information on specific prescription drugs that individual CVS customers had purchased and used this information to send targeted direct mailings urging customers to renew prescriptions and promoting other products in which they might be interested. CVS and Elensys argued that there were no privacy issues because Elensys was acting solely as a contractor to CVS, and because the purpose of the mailings was to educate consumers. CVS claimed that it never shared customers' medical histories with Elensys (despite the Washington Post's indirect evidence that they had). George D. Lundberg, editor of the Journal of the American Medical Association, called the practice "a gross invasion" of privacy. Following a firestorm of criticism and complaints by consumers, CVS discontinued the practice.

[edit] Boston prescriptions

During 2005 a rash of prescription mistakes came to light in some of CVS' Boston-area stores[2]. An investigation confirmed 62 errors or quality problems going back to 2002. In February 2006, the state Board of Pharmacy announced that the non-profit Institute of Safe Medication Practices (ISMP) would monitor all Massachusetts stores for the next two years. ^[1]

[edit] Executives accused of bribing Senator

Former CVS executives John R. Kramer and Carlos Ortiz were charged with bribery, conspiracy, and fraud (including mail fraud) by a federal grand jury for allegedly paying Senator John A. Celona (D-RI) to act as a "consultant" for the company. Between February 2000 and September 2003, CVS paid Celona $1,000 a month, and he received tickets to golf outings and sporting events and compensation for travel to Florida and California. In August 2005, he pleaded guilty to mail fraud charges, and in January 2007, he was fined a record $130,000 by the Rhode Island Ethics Committee. The investigation was led by the FBI and the Rhode Island Police, and the case was prosecuted by Assistant U.S. Attorneys Gerard B. Sullivan and Dulce Donovan. Additional information is available in a press release from the FBI's Boston field office. [3]