CVS Caremark awarded AT&T PBM contract
WOONSOCKET, R.I. CVS Caremark has been awarded a contract to provide PBM services to AT&T’s employees and retirees, effective Jan. 1, 2009.
“We are delighted that AT&T has chosen to consolidate its entire PBM business with us,” stated Tom Ryan, chairman, president and chief executive officer of CVS Caremark. “AT&T is one of our oldest and best customers, and we consider this decision to be a vote of confidence for our integrated model of delivering pharmacy health care. By consolidating their PBM business with CVS Caremark, they will be well positioned to consider a number of the unique services that only we can offer.”
Under the agreement, CVS Caremark will provide a suite of integrated pharmacy services, including claims processing, network management, rebate contracting, mail order pharmacy and specialty pharmacy services.
Commenting on the news, Lehman Brothers analyst Meredith Adler stated in a research note, “Since Caremark already had about two-thirds of the contract previously, we estimate that the incremental revenue will be about $350 million. The total contract is approximately $1.25 billion, with mail accounting for two-thirds of revenue and retail representing the other one-third.”
Adler estimated that the impact to earnings to be about 2 cents to 3 cents. “We believe AT&T’s desire to work with CVS demonstrates that payors are beginning to appreciate the value of the company’s combined model,” she stated.
Safeway president of perishables exits company
PLEASANTON, Calif. Safeway’s president of perishables, Des Hague, has left the company and will be replaced by executive Kelly Griffith. A statement from Safeway stated Hague left the company “to pursue other business opportunities.”
“We are grateful for the contributions and wish him well in his future endeavors,” said Safeway president and chief executive officer Steve Burd in a statement.
Griffith has been with Safeway for 28 years and was most recently president of the chain’s Portland Division, a position he’s held since 2005. His position is going to be filled by Steve Frisby, who is currently president of Safeway’s Texas Division. Frisby has been with Safeway since 1972.
Rite Aid purchases 12 Pharm drug stores from Spartan
GRAND RAPIDS, Mich. Almost one year following its acquisition of Brooks/Eckerd, Rite Aid is making another acquisition, albeit on a much smaller scale, with the purchase of 12 Pharm drug stores from Spartan Stores, Spartan announced Thursday morning.
“The Pharm stores have been a good business for Spartan Stores and it is staffed with hard working and dedicated associates, making this divestiture transaction a more difficult decision,” stated Craig Sturken, Spartan chairman and chief executive officer. “Divesting these stores, however, will allow us to concentrate efforts and resources on business opportunities with the best long-term growth potential and focus more on our core distribution and conventional supermarket operations. The transaction also provides the Pharm associates with good employment opportunities within Rite Aid.”
Completion of the sale is subject to customary due diligence by Rite Aid.
Spartan Stores is in negotiations to sell certain assets of its remaining two Pharm stores in independent transactions, the company stated.