A RetailWire poll in November 2006 asked whether the CVS acquisition of pharmacy benefit manager (PBM) Caremark would make it stronger in relative terms to rival Walgreens. Seventy-nine percent of respondents said it would. Only five percent said it would make it weaker.
Fast-forward to this week's announcement that Walgreens had agreed to sell its Walgreens Health Initiatives PBM to Catalyst Health Solutions and the question has changed to whether CVS needs to sell Caremark to focus on its retail business.
Lisa Lee, a Reuters Breakingviews columnist, wrote, "Since the merger of the two, the Caremark business has lost some big enterprise contracts and downgraded earnings projections. It's also spent precious management time explaining to enforcers at the Federal Trade Commission why the combination doesn't hurt consumers."
Back to Walgreens, president and CEO Greg Wasson made clear the reason behind the sale of Walgreens Health Initiatives.
"With nearly 7,700 drugstores as our center of gravity, we are focused more than ever on delivering convenient, affordable, high quality pharmacy, health and wellness solutions, and on enhancing our full scope of services to become America's first choice for health and daily living needs," Mr. Wasson said in a press release.