WOONSOCKET – The Caremark Pharmacy Services division of CVS Caremark Corp. (NYSE: CVS) has been awarded a three-year renewal of its contract to provide clinical services and retail pharmacy benefit services to the Federal Employee Program.
Caremark has been administering the FEP’s retail pharmacy benefit management program since 1993. Under the new extension, which runs through the end of 2010, it will continue to provide retail PBN services including network contracting and the management of specialized clinical programs.
Under the current contract, which expires at the end of this year, Caremark also provided mail services to the FEP. The government-wide service benefit plan – operated by Blue Cross & Blue Shield – covers about 4.7 million federal employees, retirees and dependents.
“We are pleased that FEP has chosen to continue its relationship with Caremark,” said Thomas M. Ryan, CVS Caremark’s president and CEO. “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 … 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.”
The retail and clinical portion of the program generates about $4 billion per year in revenue, the company said, making the new three-year contract a $12 billion value.
“We remain confident that we will achieve significant earnings growth in 2008 even without FEP’s mail service program,” Ryan said. “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.”
CVS Caremark Corp. (NYSE: CVS) operates 6,200 CVS/pharmacy stores; the CVS.com online pharmacy, the Caremark Pharmacy Services pharmacy benefit management, mail order and specialty pharmacy division; and the MinuteClinic retail-based health care subsidiary. Additional information is available at investor.cvs.com.