1. Pharmacy Sector - CVS/Caremark
October 22, 2015

2. 1892 - founded by shoe supplier Frank Melville
Company background
Current CEO: Larry J. Merlo – served since 2011 & 30+ years with company
founded by shoe supplier Frank Melville
Melville Corporation incorporated
first Consumer Value Store (CVS) opens in Lowell, Massachusetts
1964 – CVS name used for first time with 17 locations
Throughout the following decades purchased many other pharmacies:
Clinton Drug and Discount stores – 84 locations in Indiana and Midwest.
New Jersey-based Mack Drug chain – 36 locations in New Jersey.
Peoples Drug – 490 Locations throughout Mid-Atlantic
1997 – Revco Chains – 2500 locations in Ohio, Mid-Atlantic, and Southeast US.
sales reached $1 billion
CVS begins trading on NYSE (formerly traded as MVL)
Melville Corp. sold off other segments to focus on CVS
acquired Soma.com, the first online pharmacy, renamed it CVS.com
ExtraCare Card, first national pharmacy to launch rewards program
CVS purchased 1,268 Eckerd drug stores and Eckerd Health Services, a PBM/mail-order pharmacy business, from J. C. Penney
acquires Minneapolis-based MinuteClinic
CVS Corporation and Caremark Rx, Inc. complete their transformative merger, creating CVS Caremark, the nation's premier integrated pharmacy services provider
130+ years of success
Grown significantly by acquisition
Strategic move to focus on CVS as core business
First pharmacy website and loyalty program
MinuteClinic and Caremark acquisitions strategically diversify and grow services/ capabilities across pharmacy industry
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2015 Cigna

3. Basic relationship to CIgna
CVS is a preferred pharmacy partner in our retail pharmacy network. Cigna does not utilize CVS’ PBM capabilities, although parts of Anthem, particularly BCBS does work with CVS for PBM capabilities.
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2015 Cigna

4. CORE Strategy

5. Strategic Fit
- Increase in Demand - Supply shortage of Health Care providers - Location is a large Critical success factor - Great Cash flow and financial stability - Close Competing firms

6. Drivers

7. Growth

8. Recent performance
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2015 Cigna

9. Relation to Cigna Financial Performance
Role in Healthcare:
Tobacco Free Drive
Largest Clinical Data Analysis : using data to shape patient care
Minute Clinic and Coram
Impacts on Cigna
Covers a large portion of Anthem PBM
PBM is a Big Strategy for both Cigna – Anthem
Relation to Cigna Financial Performance
CVS have > 21% market share in Retail
Cigna disposes are 20% in mail order
We need to grow our mail order while CVS have to grow the retail order or comp sales

10. Pro and Cons of Retail vs Home Delivery
Anthem Merger Impacts
Closer look at CVS vs Express Scripts
Pro and Cons of Retail vs Home Delivery

11. Offered by: Connecticut General Life Insurance Company or Cigna Health and Life Insurance Company.
““Cigna” and the “Tree of Life“ logo are registered service marks, and “Together, all the way.” is a service mark, of Cigna Intellectual Property, Inc., licensed for use by Cigna Corporation and its operating subsidiaries. All products and services are provided by or through such operating subsidiaries, including Connecticut General Life Insurance Company and Cigna Health and Life Insurance Company, and not by Cigna Corporation. All models are used for illustrative purposes only.
/ © 2015 Cigna. Some content provided under license.