-- Collaboration under 12-year strategic agreement to improve care management and reduce costs --
-- Aetna to retain ownership of PBM and clinical program management; will benefit from CVS Caremark’s focus, scale and capabilities --
-- CVS Caremark chosen for its integrated model, innovative products and services and overall value proposition --
-- Contract to support 9.7 million Aetna PBM members representing approximately $9.5 billion in annual drug spend --
HARTFORD, Conn. & WOONSOCKET, R.I.--(BUSINESS WIRE)-- Aetna (NYSE: AET) and CVS Caremark (NYSE: CVS) today announced they have entered into a 12-year contract to provide Pharmacy Benefit Management (PBM) services that will further enhance value and service for Aetna’s customers and members. Aetna will retain its PBM and manage clinical programs, protocols and oversight of its pharmacy benefits business. CVS Caremark will serve approximately 9.7 million Aetna PBM members and administer approximately $9.5 billion in annual drug spend as it applies its unique, integrated pharmacy care delivery model to the administration of Aetna’s retail pharmacy network and management of pharmacy customer and member service functions. In addition, CVS Caremark will manage purchasing, inventory management and prescription fulfillment for Aetna’s mail-order and specialty pharmacy operations. Through this strategic agreement, Aetna will retain its position as a premier provider of PBM services while delivering enhanced service capabilities, innovative product offerings and greater value to its customers and members.
Aetna and CVS Caremark intend to deliver:
“We worked hard to construct a strategic solution that enhances our value proposition in the marketplace in a way that creates a durable competitive advantage for Aetna and long-term value for our shareholders,” said Ronald A. Williams, Aetna chairman and CEO. “Through this strategic agreement, we retain our PBM and our ability to integrate medical care with clinical and pharmacy programs and actionable data. We will add CVS Caremark's best-in-class clinical capabilities and broad market reach, enabling us to deliver better drug discounts and improved pricing and service to our customers.”
“We are very pleased to be working with Aetna, and believe our integrated approach and multi-channel platform will help Aetna deliver exceptional results for its clients and members,” said Thomas M. Ryan, CVS Caremark chairman and CEO. “With our shared vision of pharmacy care, CVS Caremark and Aetna will work together to deliver quality outcomes with lower overall health care costs. Aetna’s selection of CVS Caremark is a testament to our integrated pharmacy care model as well as our reputation for service excellence.”
“This relationship enables us to capitalize on our health information technology capabilities so that we can communicate important clinical guidance to our members at the point of care,” said Lonny Reisman, M.D., Aetna senior vice president and chief medical officer “Under this agreement, members will be provided with customized information about drug safety, evidence-based protocols and relevant clinical programs at the point of service.”
“Together, CVS Caremark and Aetna have an exciting opportunity to generate meaningful improvements in patient outcomes,” said Troyen A. Brennan, M.D., executive vice president and chief medical officer, CVS Caremark. “High-quality pharmacy care that drives adherence to essential medications has been proven to reduce overall health care costs, and we look forward to working together to make this happen for Aetna’s clients and members.”
CVS Caremark is known for improving the health and lowering the total cost of care for its clients and their members. It offers a flexible, high-quality PBM platform that can help build additional capabilities to better serve customers and members. Its leading-edge capabilities include:
Aetna will maintain and manage its core pharmacy benefits business, including:
Commencement of certain services under the agreement is subject to state insurance and similar regulatory approvals. All necessary regulatory approvals are expected to be obtained before the expected commencement date of January 1, 2011. As part of the agreement, Aetna will transfer to CVS Caremark approximately 800 PBM employees who will work in support of the transferred functions. Aetna will retain approximately 1,000 PBM employees.
Aetna will discuss the agreement on its conference call to discuss second quarter 2010 results at 8:30 a.m. ET on Wednesday, July 28th. The public may access the conference call through a live audio webcast available on Aetna’s Investor Information link on the Internet at www.aetna.com. The conference call also can be accessed by dialing 800-946-0706 or 719-457-2629 for international callers. The company suggests participants dial in approximately 10 minutes before the call. The access code is 7054750. Individuals who dial in will be asked to identify themselves and their affiliations. A replay of the call may be accessed through Aetna’s Investor Information link on the Internet at www.aetna.com or by dialing 888-203-1112, or 719-457-0820 for international callers. The replay access code is 7054750. Telephone replays will be available from 11:00 a.m. ET on July 28, 2010 until midnight ET on August 11, 2010.
Aetna is one of the nation’s leading diversified health care benefits companies, serving approximately 35.8 million people with information and resources to help them make better informed decisions about their health care. Aetna offers a broad range of traditional and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life and disability plans, and medical management capabilities and health care management services for Medicaid plans. Our customers include employer groups, individuals, college students, part-time and hourly workers, health plans, governmental units, government-sponsored plans, labor groups and expatriates. For more information, see www.aetna.com and Aetna’s Annual Report at www.aetna.com/2009annualreport.
About CVS Caremark
CVS Caremark is the largest pharmacy health care provider in the United States. Through our integrated offerings across the entire spectrum of pharmacy care, we are uniquely positioned to provide greater access, to engage plan members in behaviors that improve their health, and to lower overall health care costs for health plans, plan sponsors and their members. CVS Caremark is a market leader in mail order pharmacy, retail pharmacy, specialty pharmacy, and retail clinics, and is a leading provider of Medicare Part D Prescription Drug Plans. As one of the country’s largest pharmacy benefits managers (PBMs), we provide access to a network of more than 64,000 pharmacies, including approximately 7,000 CVS/pharmacy® stores that provide unparalleled service and capabilities. Our clinical expertise includes one of the industry’s most comprehensive disease management programs. General information about CVS Caremark is available through the Company’s Web site at http://info.cvscaremark.com.
AETNA CAUTIONARY STATEMENT -- Certain information in this press release concerning the agreement with CVS Caremark is forward-looking, including without limitation the impact and/or benefits of the agreement on Aetna, its customers and its members; the number of PBM members that CVS Caremark will support and the amount of Aetna’s drug spend; the products and services that Aetna and/or CVS Caremark may deliver under the agreement; Aetna’s expectations as to the timing of the receipt of and its ability to obtain required regulatory approvals; and Aetna’s expectations as to the date on which services will commence under the agreement. Forward-looking information is based on management’s estimates, assumptions and projections, and is subject to significant uncertainties and other factors, many of which are beyond Aetna’s control. Important risk factors could cause actual future results and other events to differ materially from those currently projected, estimated or suggested by management. Important risk factors that could materially affect statements made concerning the CVS Caremark agreement include without limitation the timely receipt of necessary regulatory and other approvals, which could be delayed for a variety of reasons related or not related to the agreement itself, and the ability to successfully implement the CVS Caremark agreement on a timely basis and in a cost-efficient manner and to achieve projected operating efficiencies for the agreement. For more discussion of important risk factors that may materially affect management’s estimates, Aetna’s results and the forward-looking statements in this press release, please see the risk factors contained in Aetna’s 2009 Annual Report on Form 10-K (Aetna’s “2009 10-K”) and Aetna’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, each on file with the Securities and Exchange Commission (“SEC”), and Aetna’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2010 (Aetna’s “Second Quarter 10-Q”), when filed with the SEC, which risk factors are incorporated herein by reference. You also should read Aetna’s 2009 10-K and Second Quarter 10-Q, when filed with the SEC, for a discussion of Aetna’s historical results of operations and financial condition.
CVS Caremark Forward-looking statements: This press release contains certain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially. For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The Company strongly recommends that you become familiar with the specific risks and uncertainties outlined under the Risk Factors section in our Annual Report on Form 10-K for the year ended December 31, 2009 and under the caption “Cautionary Statement Concerning Forward Looking Statements” in our Quarterly Report on Form 10Q for the quarter ended March 31, 2010.
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Aetna Media Contact:
Fred Laberge, 860-273-4788
CVS Caremark Media Contact:
Carolyn Castel, 401-770-5717
Aetna Investor Contact:
Kim A. Keck, 860-273-1327
CVS Caremark Investor Contact:
Nancy Christal, 914-722-4704
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