CVS Pharmacy (sometimes stylized as CVS/pharmacy) is a subsidiary of the American retail and health care company CVS Health, headquartered in Woonsocket, Rhode Island. It was also known as, and originally named, the Consumer Value Store and was founded in Lowell, Massachusetts, in 1963. The chain was owned by its original holding company Melville Corporation since its inception until its current parent company (CVS Health) was spun off into its own company in 1996. CVS Pharmacy is currently the largest pharmacy chain in the United States by number of locations (over 9,600 as of 2016) and total prescription revenue. Its parent company ranks as the 7th largest U.S. corporation by FY2017 revenues in the Fortune 500. The parent company of CVS Pharmacy's leading competitor (Walgreens) ranked 19th for the same time period.
|Consumer Value Stores (1963–1996)|
|Founded||May 8, 1963|
Lowell, Massachusetts, U.S.
|Headquarters||1 CVS Drive, |
Number of locations
|US$6.0 billion (2017)|
Number of employees
|Footnotes / references|
CVS 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. It also provides healthcare services through its more than 1,100 MinuteClinic medical clinics as well as their Diabetes Care Centers. Most of these clinics are located within CVS stores.
- 1 Overview
- 2 Acquisitions and growth
- 3 Environmental record
- 4 Controversies
- 4.1 $2.25 million HIPAA Privacy Case
- 4.2 Executives accused of bribing state senator
- 4.3 Massachusetts Prescription errors
- 4.4 Texas lawsuit over illegally dumping records containing patient information
- 4.5 Stopping cigarette sales
- 4.6 Deceptive business practices
- 4.7 Pseudoephedrine lawsuit
- 4.8 DEA investigation into oxycodone diversion
- 4.9 Allegedly racist receipt
- 4.10 CVS Rewards Program
- 4.11 Sale of homeopathic remedies
- 4.12 Security
- 4.13 Refusal of service to a transgender woman
- 4.14 Receipt length
- 5 See also
- 6 References
- 7 External links
CVS Pharmacy used to be a subsidiary of Melville Corporation, where its full name was initially Consumer Value Stores. Melville later changed its name to CVS Corporation in 1996 after Melville sold off many of its nonpharmacy stores. The last of its nondrugstore operations were sold in 1997.
During the company's days as a regional chain in the Northeast, many CVS stores did not include pharmacies. Today, the company seldom builds new stores without pharmacies and outside of New England is gradually phasing out any such shops. Any new non-pharmacy store is usually built in a more urban setting where another CVS with a pharmacy exists within walking distance such as downtown Boston, Massachusetts or Providence, Rhode Island. These stores usually lack a pharmacy and a photo center but carry most of the general merchandise items that a normal CVS Pharmacy carries such as health and beauty items, sundries, and food items.
CVS Pharmacy announced the closure of 70 stores in early 2017; nearly all 70 stores had already been closed by that time.
Acquisitions and growthEdit
The CVS name was used for the first time in 1964. That year, they had 17 retail locations, and 40 stores five years later.
In 1967, CVS began operation of its first stores with pharmacy departments, opening locations in Warwick and Cumberland, Rhode Island. CVS was acquired by the now-defunct Melville Corporation in 1969, boosting its growth.
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By 1970, CVS operated 100 stores in New England and the Northeast.
In early 1972, CVS introduced America's first refillable plastic bottle - with its CVS private-label shampoo. Customers paid $.79 for a bottle of CVS private-label shampoo and when they returned the empty bottle and cap, could buy another bottle of the same shampoo for $.69 (a 10 cent saving). This practice created a cause-related repeat-purchase cycle, wherein the customer saved $.10 as they bought another bottle of CVS shampoo and avoided using (and CVS producing) a new plastic bottle. Each initial PVC bottle, flip-top cap and label cost CVS $11.5 cents. Thus, the process paid for itself and CVS empowered customers to make a greener purchase decision and reduce their carbon footprint.
In 1972, CVS acquired 84 Clinton Drug and Discount Stores, which introduced CVS to Indiana and the Midwest. By 1974, CVS had 232 stores and sales of $100 million. In 1977, CVS acquired the 36-store New Jersey-based Mack Drug chain.
The chain had more than 400 stores by 1981. Sales reached $1 billion in 1985, partly due to the pharmacies being added to many of CVS's older stores.
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 490-store Peoples Drug chain from Imasco, which established the company in new mid-Atlantic markets including Washington, D.C., Pennsylvania, Maryland, and Virginia. In 1994 CVS started PharmaCare Management Services. The parent company decided to focus on CVS in 1995, selling off Marshalls and This End Up. The following year, they let go of Footaction/Footstar, Meldisco, Linens 'n' Things, and KB Toys. The company, then decided to change its name from Melville Corporation to CVS Corporation. In 1997, Bob's Stores were also sold, and CVS nearly tripled its 1,400 stores after purchasing the 2,500-store Revco chain. CVS bought 200 Arbor Drugs locations in 1998, opened approximately 180 new stores, closed about 160 stores, and relocated nearly 200 existing stores from strip malls to freestanding locations. In 1999 CVS acquired Soma.com, the first online pharmacy, and renamed it CVS.com. The same year, CVS launched their CVS ProCare Pharmacy for complex drug therapies.
In 1990 CVS bought the 23-store Rix Dunnington chain. In 1993, CVS withdrew from the southern California market. Formerly traded as MVL on the New York Stock Exchange, the company now trades as CVS.
2000–08: Acquisition of Eckerd and other acquisitionsEdit
In 2004 CVS purchased 1,268 Eckerd drug stores and 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, Texas, and other southern 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 midwestern and southwestern United States (with a concentration of stores in southern California and the Chicago area), and was formally completed on June 2, 2006. Transition of Sav-On and Osco stores to the CVS brand 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. Many of the stores CVS gained in January 2006 had been the stores it owned prior to 1993. Before their re-acquisition, these stores were operated under the name Sav-On Express (the Express name was used to help customers identify these 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. In some locations, CVS now has two stores less than two blocks apart.
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 throat, 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 staff. There are over 550 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 purchase 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, Rhode Island. The new pharmacy services business, including the combined pharmacy benefits management (PBM), specialty pharmacy, and disease management businesses, is headquartered in Nashville, Tennessee. 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. Walgreens made a counteroffer but dropped it. The deal closed October 30, 2008. Longs Drugs stores outside Hawaii were rebranded to CVS Pharmacy in September 2009.
2012–present: Acquisitions and conversion to CVS HealthEdit
In 2012 CVS Caremark received 59 percent of Rhode Island's tax credits.
On July 14, 2014, it was announced that CVS Caremark would acquire the Miami-based Navarro Discount Pharmacies when the deal closes, the 33 stores will remain untouched and will stay under the Navarro name.
On September 3, 2014, CVS Caremark changed its name to CVS Health and announced that it would stop selling tobacco products.
On October 25, 2014, CVS Health disabled near field communication NFC payments, disallowing customers from using Apple Pay or Google Wallet payment methods. A reason was not immediately given. Analysts suggested that it was a way to favor the MCX system, which was still under development, and of which CVS was a founding member.
On May 21, 2015, it was announced that CVS Health would acquire Omnicare, Inc. the leading provider of pharmacy services to long term care facilities, for $98.00 per share in cash, for a total enterprise value of approximately $12.7 billion, which includes approximately $2.3 billion in debt. The transaction was expected to close near the end of 2015.
On June 15, 2015, CVS Health announced its agreement to acquire Target Corporation's pharmacy and retail clinic businesses. The deal expanded CVS to new markets in Seattle, Denver, Portland and Salt Lake City. The acquisition includes more than 1,660 pharmacies in 47 states. CVS will operate them through a store-within-a-store format. Target's nearly 80 clinic locations will be rebranded as MinuteClinic, and CVS plans to open up to 20 new clinics in their stores within three years. CVS started rebranding the pharmacies within the Target stores on February 3, 2016.
In December 2017 CVS Health announced a deal to acquire Aetna. On October 10, 2018, CVS Health received approval from the United States Department of Justice to acquire Aetna, for $69 billion.
CVS announced it would close 46 "underperforming stores" in 2019, and a further 22 in 2020, without disclosing their locations.
CVS no longer owns the soma.com domain name, which it acquired with the purchase of online drugstore pioneer Soma; that domain now resides with the lingerie brand of the same name owned by clothing retailer Chico's.
By 2004, all CVS stores were able to receive electronic prescriptions.
CVS Pharmacy y másEdit
In 2015 CVS Pharmacy launched an alternative version of their CVS Pharmacy stores called CVS Pharmacy y más specifically aimed at attracting Hispanic shoppers. The first stores were launched in Florida and have since expanded to California, Puerto Rico and Texas.
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.
In 2013 CVS agreed to pay Connecticut $800,000 due to alleged mismanagement of hazardous waste. The Connecticut Department of Energy and Environmental Protection agency found that CVS had improperly identified, managed, and disposed of hazardous materials.
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$2.25 million HIPAA Privacy CaseEdit
CVS was required to pay the United States government $2.25 million in 2009 for violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy Rule. The U.S. Department of Health and Human Services Office for Civil Rights (OCR) and the Federal Trade Commission (FTC) found that CVS did not appropriately dispose of sensitive patient information or provide the necessary training on disposal to their employees.
Executives accused of bribing state senatorEdit
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. Kramer and Ortiz were acquitted after a jury trial, in May 2008.
Massachusetts Prescription errorsEdit
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. Later, a 2007 segment on ABC News 20/20 accused CVS, Walgreens and Rite Aid among other pharmacies, of making various prescription dispensing errors. This segment aired in March 2007, and included an undercover investigation. CVS responded by claiming they had designed and invested millions of dollars in a comprehensive quality assurance program.
Texas lawsuit over illegally dumping records containing patient informationEdit
Texas Attorney General Greg Abbott sued CVS in April 2007, for illegally dumping records containing confidential patient information and sensitive financial information including credit card numbers when closing an acquired Eckerd store in Liberty, Texas. CVS was accused of breaking the state's 2005 Identity Theft Enforcement and Protection Act. It was reported that this was the fourth time action had been taken against CVS for violating the 2005 law and that there were also other possible violations under the Texas Business and Commerce Code. CVS settled by paying $315,000 to the state and agreeing to overhaul its information security system.
Stopping cigarette salesEdit
As was common practice among U.S. pharmacies, CVS originally stocked cigarettes for sale to the public. This met with criticism from public health advocates of the removal of tobacco from pharmacies due to the harmful effects on health associated with smoking, who pointed to the apparent contradiction implicit in selling cigarettes while offering smoking cessation products and medications to treat ailments such as asthma that are caused or aggravated by smoking. CVS and other pharmacies that continued to sell tobacco products were subject to criticism, and attempts were made to introduce regional bans on the practice, notably by the City and County of San Francisco.
In 2007 CEO Thomas Ryan stated that the company was considering halting the sale of cigarettes within its pharmacies, acknowledging that the issue was problematic for the company. He said the company would continue selling cigarettes, citing internal market research that concluded that ceasing cigarette sales would not change the consumer practice of purchasing them.
In February 2014, CVS announced that it would stop selling cigarettes and other tobacco products at its stores and that it was challenging other retailers to do the same. The decision meant the company would forego about $1.5 billion a year in tobacco revenue. In a videotaped message, CEO Larry J. Merlo said ending tobacco sales "is the right thing to do". On September 3, 2014, CVS officially stopped selling cigarettes in its stores. A Forbes magazine article cited the move to remove tobacco products as coinciding with CVS's decision to change its corporate name from CVS Caremark to CVS Health and said this reflected a "broader health care commitment" and desire to change the future health of Americans.
Deceptive business practicesEdit
CVS Caremark has agreed to 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. 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).
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). 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). 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).
...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). 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).
On October 14, 2010, CVS was ordered to pay $77.6 million in fines and returned profits stemming from a lawsuit alleging improper control in the sale of pseudoephedrine, a drug that can be used to make methamphetamine.
DEA investigation into oxycodone diversionEdit
In 2011 the U.S. Department of Justice charged that CVS pharmacies in Sanford, Florida, ordered enough painkillers to supply a population eight times its size. Sanford has a population of 53,000 but the supply would support 400,000. According to the Drug Enforcement Administration, in 2010 a single CVS pharmacy in Sanford ordered 1.8 million oxycodone pills, an average of 137,994 pills a month. Other pharmacy customers in Florida averaged 5,364 oxycodone pills a month. Drug Enforcement Administration (DEA) investigators serving a warrant to a CVS pharmacy in Sanford on October 18, 2011, noted that "approximately every third car that came through the drive-thru lane had prescriptions for oxycodone or hydrocodone". According to the DEA, a pharmacist at that location stated to investigators that "her customers often requested certain brands of oxycodone using "street slang", an indicator that the drugs were being diverted and not used for legitimate pain management. In response, CVS, in a statement issued February 17, 2012, in response to opioid trafficking questions from USA Today, said the company was committed to working with the DEA and had taken "significant actions to ensure appropriate dispensing of painkillers in Florida".
Allegedly racist receiptEdit
In 2013 a Korean customer, Hyun Lee, was identified as "Ching Chong Lee" on her receipt from a CVS in New Jersey. Lee contacted CVS and received an email response saying that the employee would be "counseled and trained". Lee's attorney said "[The employee] should have been terminated immediately. She never got an apology. She never got anything further after she complained." On April 16, 2013, Lee filed a federal discrimination lawsuit against CVS and sought $1 million. She settled for an undisclosed sum.
CVS Rewards ProgramEdit
In 2013 CVS introduced a program that rewarded customers up to $50 per year in ExtraCare Bucks[clarification needed] in exchange for filling their prescriptions. In order to enroll in the program, customers had to sign a HIPAA waiver acknowledging, "my health information may potentially be re-disclosed and thus is no longer protected by the federal Privacy Rule." Stores had to fulfill a quota of a number of customers in the program each week. Walgreens and Rite Aid also offer rewards for filling prescriptions, although they do not require a signed HIPAA waiver.
Sale of homeopathic remediesEdit
In July 2018 the Center for Inquiry (CfI) filed a lawsuit in the Superior Court of the District of Columbia against CVS for consumer fraud over its sale of homeopathic medicines. According to Nicholas Little, CFI's Vice President and General Counsel: "... [CVS] have a responsibility to their customers and to the law to make sure that the products are not falsely marketed, and that customers are told what they are: unproven treatments which cannot work under any current understanding of science." CVS responded by describing the lawsuit as "having no merit", and stating that they were "... committed to assuring that the products [CVS] offer are safe, work as intended, comply with regulations and satisfy customers." As of June 2019, the lawsuit is still in negotiations, while CFI filed a similar suit against Walmart for their range of homeopathic products. In an August 2019 interview, Little commented that "The problem is the government agencies (the FDA and FTC) aren't doing their job. ... The FDA and FTC have rules and guidelines, but they don't enforce them." In July, 2019, CFI announced that the Stiefel Freethought Foundation was contributing an additional $150,000 to the previously committed $100,000 to support the two lawsuits.
On July 17, 2015, CVS shut down its online photo processing services, blaming a third party vendor, believed to be PNI Digital Media. According to reporters, CVS was unwilling to confirm or deny questions about whether hackers had stolen customer photographs as well as data. The site was updated on September 11, 2015, with more details of the attack. By the end of November 2015 the CVS photo website was restored, and customers may order photo services online again.
Refusal of service to a transgender womanEdit
In July 2018 a transgender woman in Arizona posted an allegation on the ACLU of Arizona website. She said she had attempted to fill prescriptions for hormone therapy at the CVS store in Fountain Hills, Arizona, and that the pharmacist had refused to fill the prescriptions and instead subjected her to loud questioning in front of other customers and pharmacy staff – demanding her to explain why she had been prescribed the medications. She said the pharmacist also refused to return the prescription notes to her or to transfer the prescription to another pharmacy. She said she filed a complaint with CVS and received no acknowledgement of her complaint until she went public with the allegation three months later. In an email to The Arizona Republic on the day they published an article about the story, CVS apologized to her, stating that the pharmacist had violated company policies and was no longer employed by CVS and that the incident "does not reflect our values or our commitment to inclusion, nondiscrimination and the delivery of outstanding patient care." The newspaper also said that the pharmacist's alleged actions may have violated the laws governing pharmacy practices.
CVS has drawn ire for the length of its receipts, specifically receipts given to people who have signed up for their ExtraCare rewards program. Due to CVS' practice of placing numerous targeted coupons on the back, these receipts can be up to 5 feet in length. CVS CEO Larry Merlo responded by saying that they were working on ways to reduce the length of the receipts by 25% and mentioned that customers can get their receipts and coupons digitally through CVS' mobile app, which requires the customer to sign up for digital coupons and receipts. However, despite this, Merlo admitted that CVS still could do a better job of making the instructions to opt out of paper receipts more clear.
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