CVS Drops Three Plans That Force Mandatory Mail

WOONSOCKET, R.I.--(BUSINESS WIRE)--Jan. 9, 2004-- CVS Corporation (NYSE:CVS) announced today that it has declined to participate in three pharmacy benefit plans administered by National Medical Health Card due to the fact that such plans require patients to fill maintenance medications exclusively through a mail order service.

In addition, CVS announced that it would no longer participate in other pharmacy benefit plans that force patients to obtain maintenance medication exclusively through mail order services. The announcement does not apply to prescription benefit plans in which CVS currently participates.

"The issue is one of patient choice," said Tom Ryan, Chairman, President and Chief Executive Officer of CVS Corporation. "Increasingly, certain pharmacy benefit managers are implementing plan designs that not only force patients to order maintenance medication through the mail, but also require patients to use captive mail order services that are owned by such PBMs."

"I want to be clear," stated Mr. Ryan. "We are not opposed to dispensing medication through mail order services. However, we are opposed to forcing patients to use a mail order service and then dictating which mail order pharmacy to use. At best, this practice eliminates patient choice and deprives them of the opportunity to obtain personal counseling from a community pharmacist. At worst, it is unfair and anti-competitive."

As a leading community pharmacy, CVS fills over 10% of all prescriptions dispensed in the United States and serves over 3.5 million customers a day. In a recently released survey of pharmacy customers conducted by Wirthlin Worldwide, an overwhelming majority indicated that they oppose mandatory mail plans.

CVS and its affiliated pharmacy benefit manager, PharmaCare Management Services, have been working with employer groups to design pharmacy benefit plans that reduce cost for the employer and employee while maintaining high quality health care services. In the course of these discussions, many employers have expressed an interest in exploring plan designs that provide employees with a choice of filling 90-day supply orders for maintenance medications at retail stores.

One example of an employer who recently implemented a 90-day retail feature in a plan administered by another PBM is NDCHealth Corporation. Walter M. Hoff, Chairman and Chief Executive Officer of NDCHealth, commented as follows: "We revised our plan design to provide our associates with a choice of filling their 90-day prescriptions in retail stores and the response has been overwhelmingly positive. Our colleagues greatly value the opportunity to obtain personal counseling from a community pharmacist. In addition to the morale boost for our employees, there has been no increase in overall pharmacy costs."

Mr. Ryan concluded, "We remain committed to exploring alternative plan designs that preserve patient choice and to delivering high quality cost effective pharmacy services. We look forward to engaging employers, managed care organizations and other payers in a productive dialogue regarding all aspects of pharmaceutical plan design."