June 6, 2007
CVS Caremark Wins 3-Year Blue Cross and Blue Shield Federal Employee Program (FEP) Contract Renewal for Retail Pharmacy and Clinical Services
CVS Caremark Corporation (NYSE: CVS) today announced its Caremark Pharmacy Services division has been awarded a three-year contract renewal to provide retail pharmacy benefit services and all clinical services for the Blue Cross and Blue Shield Government-wide Service Benefit Plan, also known as the Federal Employee Program (FEP). FEP covers approximately 4.7 million federal employees, retirees and dependents. The retail and clinical portion of the program generates approximately $4 billion of revenue annually.
Caremark has been administering FEP's retail pharmacy benefit management program since 1993. Under terms of the new agreement, Caremark will continue to provide retail pharmacy benefit management services through 2010, including network contracting and management of a comprehensive suite of highly-customized clinical programs. Caremark's previous award of the mail service program for FEP was effective January 1, 2005 and continues through year end 2007.
Tom Ryan, President and Chief Executive Officer of CVS Caremark, stated, "We are pleased that FEP has chosen to continue its relationship with Caremark. FEP is a highly-valued client and we are committed to continuing to deliver on the high service levels and patient satisfaction scores that we have provided to FEP's federal employees, retirees and their families over the years. While we are disappointed in the decision to outsource the mail fulfillment to a third party beginning in 2008, we are happy to continue as the pharmacy benefit manager providing coordination of all clinical aspects of the program."
Mr. Ryan continued, "We remain confident that we will achieve significant earnings growth in 2008 even without FEP's mail service program. We have a solid pipeline of renewals and new PBM contract prospects as well as a robust retail pharmacy business and significant merger-related synergies that will drive our growth next year and beyond."
About CVS Caremark
CVS Caremark is the #1 provider of prescriptions and related healthcare services in the nation. The Company fills or manages more than 1 billion prescriptions annually. Through its unmatched breadth of service offerings, CVS Caremark is transforming the delivery of healthcare services in the U.S. The Company is uniquely positioned to effectively manage costs and improve healthcare outcomes through its approximately 6,200 CVS/pharmacy stores; its pharmacy benefit management, mail order and specialty pharmacy division, Caremark Pharmacy Services; its retail-based health clinic subsidiary, MinuteClinic; and its online pharmacy, CVS.com. General information about CVS Caremark is available through the Investor Relations portion of the Company's website, at http://investor.cvs.com, as well as through the pressroom portion of the Company's website, at www.cvs.com/pressroom.