CVS/pharmacy
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| Type | Subsidiary of CVS Caremark |
|---|---|
| Founded | May 8, 1963 |
| Headquarters | Woonsocket, Rhode Island |
| 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) |
| Website | www.cvs.com |
CVS/pharmacy (commonly called CVS) is a pharmacy and convenience store chain in the United States. CVS is one of the largest pharmacy chains in the United States, with approximately 6,800 stores across 41 states and soon Puerto Rico.[1] As the retail pharmacy division of CVS Caremark, it sells prescription drugs and a wide assortment of general merchandise, including over-the counter drugs, beauty products and cosmetics, film and photo finishing services, seasonal merchandise, greeting cards and convenience foods through their CVS/pharmacy and Longs Drugs retail stores and online through CVS.com. They also provide healthcare services through its MinuteClinic healthcare clinics as well as their Diabetes Care Centers. Most of these clinics are located within CVS stores.
CVS is incorporated in Delaware, and is based in Woonsocket, Rhode Island. It was founded in Lowell, Massachusetts in 1963.
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Name
CVS/pharmacy used to be a subsidiary of Melville Corporation until Melville changed its name to CVS Corporation in 1996.
The initials once stood for Consumer Value Stores, but CEO Tom Ryan has said he now considers it to stand for "Customer, Value, and Service."[2]
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."[citation needed] Additionally, in some jurisdictions, pharmacies are required to label themselves as such. 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.
Acquisitions and growth
- In 1964, CVS had 17 stores that sold 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.
- 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.
- 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 2004, CVS purchased 1,268 Eckerd drug stores, as well as Eckerd Health Services, a PBM/Mail-order pharmacy business, from JCPenney. Most of the former Eckerd stores, which were converted to CVS stores by June, are located in Florida and Texas, as well as other Southeastern states. Because JCPenney credit cards were accepted at Eckerd locations, CVS continues to accept them as well.
- 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.
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- 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.[3] In some locations CVS now has two stores less than two blocks apart. In Bloomington, Indiana, stores #8671 and #6697 are directly across the street from each other.
- 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 physician assistants and nurse practitioners to assure the highest quality of care. There are currently over 250 locations across the United 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 Corporation 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.
- On November 7, 2007, Mac Crawford stepped down as Chairman of the Board for CVS Caremark. He was replaced by President and CEO of CVS Caremark, Tom Ryan.
- On August 12, 2008, CVS Pharmacy announced that it would acquire Longs Drugs for $2.9 billion. The transaction is expected to be completed by year's end. CVS is buying the 521 Longs locations to expand its presence on the West Coast, primarily in California.
Online
The domain cvs.com attracted at least 26 million visitors annually by 2008 according to a Compete.com survey.
Private label
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CVS has a variety of private labels and outside brands. In addition to CVS/pharmacy brand, it also carries its own store brands under the names Essence of Beauty, Gold Emblem, Stars and Stripes and Round the House. CVS also has exclusive agreements to sell outside brands such as Life Fitness, Christophe, Ellin Lavar, PreVentin-AT, Skin Effects, the Scandinavian Lumene, and an exclusive Playskool line of baby care items. CVS was also first to sell single-use digital cameras and camcorders from Pure Digital.
Environmental Record
In 2005, CVS participated in a program to reduce the pollution of Maine's waterways. CVS agreed to accept drugs for disposal, so that people would not dispose of them in ways that reach rivers and other bodies of waters.[4][5][6]
Controversies
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.
Boston prescriptions
During 2005 a rash of prescription mistakes came to light in some of CVS Corporation's Boston-area stores. 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.[7]
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 State 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 State 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.[8]
20/20
A segment on 20/20 accused CVS, Walgreens and Rite Aid among other pharmacies, of making various prescription dispensing errors. This segment aired in March 2007 and was called "ABC News '20/20' Undercover Pharmacy Investigation". CVS responded by claiming they have designed and invested millions of dollars in a comprehensive quality assurance program.[9]
CVS sued by Texas for illegally dumping patient info
Texas Attorney General Greg Abbott has sued CVS as of April 2007, for illegally dumping confidential patient information while closing an acquired Eckerd store in Liberty, Texas. CVS is accused of breaking the 2005 Identity Theft Enforcement and Protection Act. There are also other possible violations under the violations under Chapter 35 of the Business and Commerce Code.[10]
Deceptive Business Practices
In February 2008, CVS settled a large civil lawsuit for deceptive business practices. The Kaiser Family Foundation reported:[11]
CVS Caremark has agreed to a a $38.5 million settlement in a multi-state civil deceptive-practices lawsuit against pharmacy benefit manager Caremark filed by 28 attorneys general, the Chicago Tribune reports.[12] The attorneys general, led by Lisa Madigan (D) of Illinois and Douglas Ganslar (D) of Maryland, allege that Caremark "engaged in deceptive business practices" by informing physicians that patients or health plans could save money if patients were switched to certain brand-name prescription drugs (Miller, Chicago Tribune, 2/14).[12]
However, the switch often saved patients and health plans only small amounts or increased their costs, while increasing Caremark's profits, Connecticut Attorney General Richard Blumenthal (D) said (Levick, Hartford Courant, 2/15).[13] Pennsylvania Attorney General Tom Corbett (R) said the PBM kept discounts and rebates that should have been passed on to employers and patients (Levy, AP/San Francisco Chronicle, 2/14).[14] In addition, Caremark did not "adequately inform doctors" of the full financial effect of the switch and did not disclose that the switch would increase Caremark's profits, the lawsuit alleges (Chicago Tribune, 2/14).[12]
...The settlement prohibits Caremark from requesting prescription drug switches in certain cases, such as when the cost to the patient would be higher with the new prescription drug; when the original prescription drug's patent will expire within six months; and when patients were switched from a similar prescription drug within the previous two years (Hartford Courant, 2/15).[13] Patients also have the ability to decline a switch from the prescribed treatment to the prescription offered by the pharmacy under the settlement, Madigan said (Bloomberg News/Philadelphia Inquirer, 2/15).[14]
External links
- CVS e-commerce site
- CVS Corporation site
- MinuteClinic site
- For All The Ways You Care - CVS/Pharmacy Publicity
References
- ^ Walgreens has approximately the same number of stores as CVS, but a considerably smaller market capitalization and revenue. As of December 29, 2007, CVS Caremark had 6,245 retail drugstores in 40 states and the District of Columbia, in addition to other retail facilities. Walgreens had 6,237 as of February 29, 2008. See:
- "Profile: CVS Caremark Corp.". Yahoo! Finance. Retrieved on 2008-03-06.
- "Store Count by State". Walgreens. Retrieved on 2008-03-06.
- "CVS Caremark Corp. (CVS) Competitors". Yahoo! Finance. Retrieved on 2008-03-06.
- ^ Berlinski, Peter (January/February 2006). "Ryan Preaches PL to CVS Team", Private Label Magazine. Retrieved on 3 March 2008.
- ^ CVS Caremark. "CVS to Postpone Shareholder Meeting to Vote on Caremark Merger". Press release. Retrieved on 2008-03-03.
- ^ "Maine's First Drug Take Back Keeps Waterways Cleaner", Environment News Service, February 9, 2005. Retrieved May 8, 2008.
- ^ "CVS Pharmacy Plans Drug Collection for S. Portland, Maine",NERC Email Bulletin, January 2005. Retrieved May 16, 2008.
- ^ "Cleaning Up Medical Waste", MSW Management, Elements 2007, Vol. 16, No. 4. Retrieved May 16, 2008
- ^ Rowland, Christopher (2006-02-10). "CVS faces pharmacy reviews", Boston Globe. Retrieved on 25 February 2008.
- ^ U.S. Department of Justice (2007-01-18). "Two CVS executives are accused of paying State Senator John Celona to advance the drug company's legislative agenda". Press release. Retrieved on 2008-02-25.
- ^ "Drugstores Respond to '20/20'", The Blotter, ABC News (2007-03-30). Retrieved on 25 February 2008.
- ^ "CVS accused of dumping Texas customers' records", AP/Dallas Morning News (2007-04-17). Retrieved on 25 February 2008.
- ^ "CVS Caremark Agrees To Pay $38.5M To Settle Allegations That It Did Not Pass on Rebates, Discounts to Patients, Employers". Kaiser Daily Health Policy Report. Kaiser Family Foundation (2008-02-15). Retrieved on 2008-02-25.
- ^ a b c Miller, James P. (2008-02-14). "CVS Caremark settles deceptive-practices complaint for $38.5 million", Chicago Tribune. Retrieved on 25 February 2008.
- ^ a b Levick, Diane (2008-02-15). "Caremark Settles States' Probe", Hartford Courant. Retrieved on 25 February 2008.
- ^ a b Levy, Marc (2008-02-14). "Caremark to pay $38M to settle drug-switching complaint", AP/San Francisco Chronicle. Retrieved on 25 February 2008.
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