A newer CVS Pharmacy storefront in St. Louis, Missouri
|Consumer Value Stores (1963-1996)|
|Founded||May 8, 1963
Lowell, Massachusetts, United States
|Headquarters||Woonsocket, Rhode Island, United States|
Number of locations
|7,600 stores (2014 estimate)|
|Revenue||US$55.663 billion[dated info] (2009)|
|US$2.019 billion[dated info] (2009)|
|US$1.660 billion[dated info] (2009)|
Number of employees
|80,000[dated info] (2005)|
CVS Pharmacy (styled as CVS/pharmacy or simply CVS) is an American pharmacy retailer and currently stands as the second largest pharmacy chain, after Walgreens, in the United States, with more than 7,600 stores, and is the second largest US pharmacy based on total prescription revenue. As the retail pharmacy division of CVS Health, it ranks as the 12th largest company in the world according to Fortune 500 in 2014. CVS Pharmacy's leading competitor Walgreens ranked 37th.
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 1000 MinuteClinic medical clinics  as well as their Diabetes Care Centers. Most of these clinics are located within CVS stores.
CVS is incorporated in Delaware, and is based in Woonsocket, Rhode Island. As of 2008, CVS Caremark was the largest for-profit employer in Rhode Island. It was founded on Merrimack Street in Lowell, Massachusetts, in 1963, under the name Consumer Value Store. It was founded by Sid Goldstein, Stanley Goldstein, and Ralph Hoagland, as a discount health and beauty aid store. The first customers were required to bag their own purchases.
- 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 Prescription errors
- 4.4 Texas lawsuit over illegally dumping patient information
- 4.5 Cigarette sales
- 4.6 Deceptive business practices
- 4.7 Methamphetamine lawsuit
- 4.8 DEA investigation into oxycodone diversion
- 4.9 Homeless man strangled for shoplifting
- 4.10 Racist receipt
- 4.11 CVS Rewards Program
- 4.12 Homeopathy
- 4.13 Apple Pay
- 4.14 Security
- 5 References
- 6 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 non-pharmacy stores. The last of its non-drugstore 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 or Providence. 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.
Acquisitions and growth
The CVS name was used for the first time in 1964. That year, they had 17 retail locations, and 40 stores only 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.
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.
By 1970, CVS operated 100 stores in New England and the Northeast.
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 Imsco, 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 Kay-Bee Toys, and the company changed 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.
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 J. C. Penney 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.
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 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 is expected to close near the end of 2015.
On June 15, 2015, CVS Health announced its agreement to acquire Target’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 no longer owns the soma.com domain name, which it acquired with the purchase of online drugstore pioneer Soma. The domain name now belongs to a lingerie retailer.
By 2004, all CVS stores were able to receive electronic prescriptions.
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.
||This article's Criticism or Controversy section may compromise the article's neutral point of view of the subject. (February 2014)|
$2.25 million HIPAA Privacy Case
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 senator
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. Additional information is available in a press release from the FBI's Boston field office.
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 20/20 accused CVS, Walgreens and Rite Aid among other pharmacies, of making various prescription dispensing errors. This segment aired in March 2007 and was called "ABC News '20/20' Undercover Pharmacy Investigation." CVS responded by claiming they have designed and invested millions of dollars in a comprehensive quality assurance program.
Texas lawsuit over illegally dumping patient information
Texas Attorney General Greg Abbott sued CVS in April 2007, for illegally dumping confidential patient information while closing an acquired Eckerd store in Liberty, Texas. CVS is accused of breaking the 2005 Identity Theft Enforcement and Protection Act. There are also other possible violations under the violations under Chapter 35 of the Business and Commerce Code. CVS settled by paying $315,000 to the state and agreeing to overhaul its information security system.
In common with other US pharmacies, CVS originally stocked cigarettes for sale to the public. Some campaigners in the USA advocate the removal of tobacco from pharmacies due to the health risks associated with smoking and the apparent contradiction of selling cigarettes alongside smoking cessation products and asthma medication. CVS and other pharmacies who continue to sell tobacco products have been subject to criticism, and attempts have been 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, but had not done so, citing internal market research that discovered ceasing cigarette sales will not change consumer behavior (of buying cigarettes).
In February 2014, CVS announced that it would stop selling cigarettes and other tobacco products at its stores, challenging other retailers to follow its lead. The decision meant the company would forfeit $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 coincides with CVS's decision to change its corporate name from CVS/Caremark Corp to CVS Health. This move reflects “its broader health care commitment” and desire to change the future health of Americans.
Deceptive business practices
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, an ingredient used to make methamphetamine.
DEA investigation into oxycodone diversion
According to the US Justice Department, last year[when?] 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. 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 Feb 17 in response to opioid trafficking questions from USATODAY said the company is committed to working with the DEA and had taken "significant actions to ensure appropriate dispensing of painkillers in Florida."
Homeless man strangled for shoplifting
On May 8, 2010, a homeless man named Anthony Kyser was strangled to death by a CVS store manager after allegedly stealing toothpaste and crayons. Surveillance footage from an alleyway near the store was captured which shows the alleged shoplifter being forced to the ground and killed by the store manager, Pedro Villanova. Though the death was ruled a homicide by the Cook County Medical Examiner's office, no charges were filed against the manager, the authorities having ruled the incident an "accident." No investigation was made into the off-duty county officer who was on scene, but did nothing to stop the attack. U.S. Rep. Bobby Rush, who spoke out in 2010 against the way Kyser's death was handled, stated "... we have video that shows emphatically that he was lying on the ground and some people strangled him, kicked him and choked him and at the end of that episode he lay still, he was killed, right there on the spot." The video shows a police officer arrived on the scene moments after the incident occurred; however, no first aid was given to the victim. Kyser's parents filed a lawsuit claiming that the CVS manager assaulted and battered their son and that the store is responsible for that manager's actions. The lawsuit, seeking $400,000 in damages, remains pending in Cook County Circuit Court.
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." According to Lee's attorney, "[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 is seeking $1 million.
CVS Rewards Program
In 2013, CVS introduced a program that rewarded customers up to $50 per year in ExtraCare Bucks 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.
On October 25, 2014, CVS disabled NFC (near field communication) payments from the newly initiated Apple Pay mobile payment system. Apple Pay was officially launched on October 21, 2014, and functioned for the first few days after its launch, allowing CVS customers to make purchases securely using their iPhone 6 and iPhone 6 Plus. This followed the pharmacy chain Rite Aid to stop accepting payments via Apple Pay two days prior. CVS had been working with other partners on a competing system, CurrentC that involves scanning a QR code instead of using an NFC chip. Full CurrentC functionality is not expected until 2015 at the earliest.
On July 17, 2015 CVS shut down its online photo processing services because of hackers , blaming a third party vendor, believed to be PNI Digital Media. According to reporters, CVS were were 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. As of October 28, 2015 the website was still offline, with no ETA on return.
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