CVS Pharmacy

CVS Pharmacy Inc.
	File:CVS Pharmacy logo.svg Logo used since 2014
Company type	Division
Industry	Retail pharmacy
Predecessor	Consumer Value Stores
Founded	January 1, 1963; 63 years ago in Lowell, Massachusetts, United States
Headquarters	Woonsocket, Rhode Island, United States
Area served	United States
Key people	David Joyner (CEO)
Products	Prescription medications, over-the-counter drugs, beauty products, seasonal merchandise, convenience foods, MinuteClinic medical services, Diabetes Care Centers
Owner	CVS Health
Parent	CVS Health
Website	cvs.com

CVS Pharmacy Inc. is a prominent American retail company and a division of CVS Health, with its headquarters situated in Woonsocket, Rhode Island. Established in 1963 in Lowell, Massachusetts under the name Consumer Value Stores, it remained under the ownership of Melville Corporation until CVS Health was spun off in 1996. As of 2016, CVS Pharmacy stands as the largest pharmacy chain in the United States by store count, boasting over 9,600 locations, as well as by prescription sales. Its parent entity secured the fifth position on the Fortune 500 list for fiscal year 2020 based on revenue, surpassing Walgreens’ parent company, which was ranked 19th.

The company's offerings include prescription medications alongside a wide variety of general merchandise such as over-the-counter drugs, beauty items, seasonal products, and convenience foods available at CVS Pharmacy and Longs Drugs outlets, as well as through its online platform CVS.com. Additionally, CVS operates more than 1,100 MinuteClinic medical facilities and Diabetes Care Centers, primarily located inside or adjacent to its retail stores, thus broadening its healthcare services.

Overview

Originating as a division of Melville Corporation, CVS Pharmacy was initially called Consumer Value Stores. In 1996, following the divestiture of most nonpharmacy assets, Melville rebranded to CVS Corporation and completed the disposal of its remaining non-drugstore businesses by 1997. Former CEO Tom Ryan explained that "CVS" embodies "Customer, Value, and Service," which reflects the company’s operational philosophy.

At first concentrated in the Northeastern United States, many early CVS locations did not feature pharmacies. Presently, CVS seldom inaugurates new stores without pharmacy services and is gradually eliminating non-pharmacy outlets outside of New England. In urban centers such as Boston, Massachusetts and Providence, Rhode Island, non-pharmacy stores typically situated near full-service CVS Pharmacies specialize in health and beauty products, sundries, and food items.

On October 18, 2024, David Joyner—previously leading Caremark—assumed the role of CEO from Karen Lynch, marking a notable change in the executive leadership at CVS.

1960s

The "CVS" brand was introduced in 1964 with an initial network of 17 stores that expanded to 40 by 1969. That same year marked the launch of CVS’s first pharmacy departments located in Warwick and Cumberland, Rhode Island. Also in 1969, Melville Corporation acquired CVS, accelerating its growth trajectory.

1970s

By 1970, CVS had grown to operate 100 stores across New England and the broader Northeast region. In 1972, the company pioneered America’s first refillable plastic bottle for its private-label shampoo products—a strategy that reduced costs for repeat customers while minimizing plastic waste. That year also saw CVS’s expansion into the Midwest through the acquisition of 84 Clinton Drug and Discount Stores. By 1974, CVS had increased its footprint to 232 stores with sales reaching $100 million. The acquisition of Mack Drug’s 36-store chain based in New Jersey followed in 1977.

1980s

By 1981, CVS managed over 400 locations and achieved $1 billion in sales by 1985—a growth partly fueled by integrating pharmacies into existing outlets. In 1980, CVS ranked as the nation’s 15th largest pharmacy chain with 408 stores generating $414 million in revenue. Approaching its quarter-century milestone in 1988, the company operated nearly 750 stores with sales around $1.6 billion.

1990s

In 1990, CVS broadened its presence in the mid-Atlantic region by purchasing the 490-store Peoples Drug chain. The company introduced PharmaCare Management Services in 1994 and concentrated on its primary pharmacy operations by selling off non-pharmacy retail businesses between 1995 and 1997, including Marshalls and Footaction. During this period, the company transitioned its name from Melville Corporation to CVS Corporation. A significant expansion occurred in 1997 with the acquisition of the 2,500-store Revco chain, which nearly tripled CVS’s store count to approximately 1,400 locations. The following year, CVS took over 200 Arbor Drugs outlets and refined its store network through strategic openings, closures, and relocations. In 1999, CVS entered the digital pharmacy arena by acquiring Soma.com, later rebranded as CVS.com, and launched CVS ProCare Pharmacy to provide specialized medication therapies.

Additional purchases included the acquisition of the 23-store Rix Dunnington chain in 1990. Although CVS exited southern California in 1993, it eventually reestablished its presence in that market.

2000–2008: Acquisition of Eckerd and other acquisitions

In 2000, CVS expanded by acquiring Stadtlander Pharmacy from Bergen Brunswig/AmerisourceBergen. By December 2009, CVS Caremark operated more than 7,000 locations nationwide.

The company’s growth strategy advanced with the 2004 acquisition of 1,268 Eckerd drugstores and Eckerd Health Services from J. C. Penney, primarily located in Florida, Texas, and other southern states. These stores were converted into CVS outlets by mid-2004. CVS continued to accept JCPenney credit cards until July 2014.

In January 2006, CVS announced it would acquire Albertsons’ standalone drugstores—including roughly 700 Osco Drug and Sav-On Drugs locations—mainly situated in the Midwest and Southwest regions. The transaction was finalized by June of that year. This acquisition reestablished CVS’s stronghold in southern California after its earlier withdrawal in 1993. Additionally, the deal included Albertsons Health'n'Home durable medical equipment stores—marking CVS’s entry into specialized DME markets with about 28 outlets across Arizona, California, and Kansas City.

CVS currently operates over 6,200 pharmacies across 43 states plus Washington D.C., often maintaining multiple stores within close proximity.

On July 13, 2006, CVS acquired Minneapolis-based MinuteClinic—the largest retail health clinic operator in the U.S.—with more than 550 clinics primarily located inside CVS pharmacies. MinuteClinic provides care for common illnesses and vaccinations through nurse practitioners and physician assistants working under physician supervision.

On November 1, 2006, CVS announced a merger with Nashville-based pharmacy benefits manager Caremark Rx Inc., creating CVS Caremark Corporation headquartered in Woonsocket, Rhode Island; pharmacy services were based in Nashville. The combined company anticipated $75 billion in annual revenue for 2007. Tom Ryan remained as president and CEO of the merged entity while Caremark’s Mac Crawford became chairman of the board. Crawford resigned as chairman on November 7, 2007; Ryan then assumed that position as well.

On August 12, 2008, CVS agreed to purchase Longs Drugs for $2.9 billion after Walgreens withdrew a competing bid. The acquisition was completed on October 30, 2008; Longs Drugs locations outside Hawaii were rebranded as CVS Pharmacy by mid-2009.

Developments Since 2012: Acquisitions and Transition to CVS Health

In 2012, CVS Caremark secured 59 percent of Rhode Island’s available tax credits.

On July 14, 2014, CVS Caremark announced it had acquired Miami-based Navarro Discount Pharmacies, choosing to maintain the Navarro brand across its 33 locations.

By September 3, 2014, CVS Caremark transitioned its corporate identity to CVS Health and declared it would discontinue the sale of tobacco products, reflecting a strategic shift toward health-focused services.

On October 25, 2014, CVS Health temporarily disabled near-field communication (NFC) payment options like Apple Pay and Google Wallet, likely to support the Merchant Customer Exchange (MCX) platform, of which CVS was an initial participant. These NFC payment methods were reinstated after MCX failed to gain widespread adoption.

On May 21, 2015, CVS Health reached an agreement to purchase Omnicare, Inc., a prominent provider of pharmacy services for long-term care facilities, in a transaction valued at approximately $12.7 billion including debt. This acquisition broadened CVS’s presence in specialized pharmacy sectors.

On June 15, 2015, CVS Health expanded further by acquiring Target Corporation’s pharmacy and retail clinic operations. This deal added over 1,660 pharmacies in 47 states and nearly 80 clinics rebranded as MinuteClinic. The acquisition introduced CVS into new regional markets such as Seattle, Denver, Portland, and Salt Lake City. These pharmacies operate within a store-within-a-store model.

In December 2017, CVS Health announced its intention to acquire Aetna for $69 billion. This major health insurer acquisition received approval from the U.S. Department of Justice on October 10, 2018, significantly enhancing CVS’s healthcare service capabilities and market reach.

CVS proceeded with plans to close underperforming outlets: shutting down 46 stores in 2019 and an additional 22 in 2020 without specifying their locations.

In May 2020, CVS collaborated with New York Governor Andrew Cuomo to expand COVID-19 testing services at more than 60 pharmacies capable of processing up to 1.5 million tests per month—demonstrating adaptability in addressing public health demands.

In November 2021, CVS disclosed intentions to close around 900 stores over a three-year period due to declining sales performance at certain sites.

In January 2024, the company announced it would shutter several Target pharmacy locations between February and April as part of a broader strategy to reduce approximately 10% of its store count amid evolving market conditions and workforce challenges. At that time, CVS operated about 1,800 pharmacies within Target’s total of roughly 1,950 stores.

On February 5, 2024, CVS Pharmacy declared the sale of its Puerto Rico-based stores to Caribe Pharmacy Holdings (Farmacias Caridad), signaling strategic adjustments in its international portfolio.

Antitrust Issues

CVS Health’s approach of vertical integration merges its retail pharmacy operations with insurance services and pharmacy benefit management (PBM), notably through its acquisition of Aetna and ownership of CVS Caremark. This consolidation enhances CVS’s control over the supply chain but has sparked antitrust scrutiny. Alongside UnitedHealth Group’s Optum and Cigna’s Express Scripts, CVS Caremark ranks among the three largest PBMs in the United States. The Federal Trade Commission (FTC) has accused these PBMs of engaging in anticompetitive behavior such as conflicts of interest and inflating prices. Additionally, the American Medical Association (AMA) opposed the merger between CVS and Aetna due to concerns over diminished competition and increased costs for consumers.

CVS Rewards Program

Introduced in 2013, CVS’s ExtraCare Rewards initiative provides customers with up to $50 in store credit annually for prescription refills. Joining the program requires customers to sign a HIPAA waiver that permits possible re-disclosure of their health information, a practice that sets CVS apart from competitors like Walgreens and Rite Aid, which offer rewards programs without such waivers. Additionally, stores were expected to fulfill weekly enrollment targets for this rewards system.

Discontinuation of cigarette sales

Initially, CVS sold cigarettes, a widespread practice among American pharmacies, which faced criticism from public health advocates due to the inconsistency of vending tobacco products alongside smoking cessation aids. Efforts by cities such as San Francisco to ban tobacco sales in pharmacies intensified the pressure on CVS and its rivals.

In 2007, then-CEO Thomas Ryan recognized the issue but maintained cigarette sales, referencing market research indicating that discontinuing tobacco products would not significantly influence consumer buying behavior.

In February 2014, CVS declared it would stop selling cigarettes and other tobacco items, sacrificing approximately $1.5 billion in yearly revenue. CEO Larry J. Merlo described the decision as "the right thing to do," urging other retailers to follow their lead. The official cessation of tobacco sales occurred on September 3, 2014, coinciding with CVS’s rebranding from CVS Caremark to CVS Health—a deliberate move highlighting an expanded focus on healthcare and enhancing public health.

Online presence

By 2008, CVS.com had attracted more than 26 million visitors annually, demonstrating significant digital engagement. After acquiring online drugstore pioneer Soma, CVS sold the soma.com domain; it is now owned by Chico's lingerie brand Soma.

By 2004, all CVS locations had implemented electronic prescription systems, improving both efficiency and customer service capabilities.

CVS Pharmacy y más

In 2015, CVS introduced CVS Pharmacy y más, a store format designed specifically for Hispanic consumers. Initially launched in Florida, this concept has since expanded to California, Puerto Rico, Texas, and New Jersey as part of CVS's broader strategy to engage diverse demographic groups and stimulate business expansion.

Environmental initiatives

In 2005, CVS took part in a program aimed at reducing pollution in Maine’s waterways by accepting unwanted medications for safe disposal, thus preventing contamination of rivers and other aquatic environments.

In 2013, CVS agreed to pay $800,000 to the state of Connecticut after its Department of Energy and Environmental Protection determined that the company had inadequately identified, handled, and disposed of hazardous waste.

Prescription refusals after Dobbs

Following the Supreme Court's Dobbs ruling that overturned Roe v. Wade, CVS directed pharmacists in six states to decline filling prescriptions for certain medications potentially used to induce abortions unless patients could demonstrate they were not utilizing them for this purpose—even if these were longstanding prescriptions. This policy sparked concern among advocates for patients with autoimmune diseases like Crohn’s disease due to the risk of denying access to necessary treatments.

$2.25 million HIPAA Privacy Settlement

In 2009, CVS agreed to pay $2.25 million to the U.S. government due to violations of the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule. Investigations by the U.S. Department of Health and Human Services Office for Civil Rights (OCR) and the Federal Trade Commission (FTC) revealed that CVS inadequately disposed of confidential patient records and failed to provide sufficient employee training regarding proper disposal methods.

Bribery allegations against former executives

John R. Kramer and Carlos Ortiz, former executives at CVS, were federally charged with bribery, conspiracy, and fraud for allegedly compensating State Senator John A. Celona under the guise of a "consultant" role. Between 2000 and 2003, CVS paid Celona $1,000 each month and offered additional benefits such as event tickets and travel reimbursements. Celona admitted guilt to mail fraud in 2005 and was fined $130,000 by the Rhode Island Ethics Committee in 2007. The FBI and Rhode Island State Police led the investigation known as Operation Dollar Bill. Kramer and Ortiz were acquitted following a jury trial in 2008.

Prescription mistakes in Massachusetts

From 2002 through 2005, CVS locations around Boston reported 62 instances of prescription errors or related quality concerns. In response, the Massachusetts Board of Pharmacy appointed the Institute for Safe Medication Practices (ISMP) in 2006 to oversee CVS pharmacies statewide for a two-year period. A 2007 ABC News 20/20 report brought attention to dispensing errors at CVS and other leading pharmacy chains. CVS highlighted its commitment by noting significant investments in a robust quality assurance program aimed at improving patient safety.

Texas lawsuit over improper disposal of patient records

In April 2007, Texas Attorney General Greg Abbott filed suit against CVS for unlawfully discarding records containing sensitive patient and financial data—including credit card information—while closing a purchased Eckerd location in Liberty, Texas. The company was accused of breaching the state's 2005 Identity Theft Enforcement and Protection Act. This case represented the fourth enforcement action against CVS related to this statute and potential violations of the Texas Business and Commerce Code. CVS resolved the matter by paying $315,000 and committing to revamp its data security protocols.

Claims of deceptive business conduct

In February 2008, CVS reached a $38.5 million settlement in a multi-state civil lawsuit concerning deceptive practices connected to its pharmacy benefit manager, Caremark. The case, brought by 28 state attorneys general, alleged that Caremark misled doctors by encouraging medication switches that frequently resulted in minimal savings or higher costs for patients and health plans while increasing Caremark’s profits.

Connecticut Attorney General Richard Blumenthal asserted that these drug switches primarily served to enhance Caremark’s revenue. Pennsylvania Attorney General Tom Corbett charged Caremark with withholding discounts and rebates that should have been passed on to employers and patients. The lawsuit also claimed Caremark failed to fully disclose to physicians the financial consequences or profit incentives behind these switches.

Under the settlement terms, Caremark is barred from recommending drug switches when they raise patient expenses, involve medications nearing patent expiration, or occur within two years of a previous switch. Additionally, patients now have the right to refuse such switches, promoting greater transparency and consumer empowerment.

Lawsuit Regarding Pseudoephedrine

On October 14, 2010, CVS was mandated to pay $77.6 million in penalties and disgorged profits as a result of litigation accusing the company of insufficient regulation over pseudoephedrine sales, a substance used in the manufacture of methamphetamine.

DEA Probe into Oxycodone Diversion

In 2011, the U.S. Department of Justice alleged that CVS outlets in Sanford, Florida, ordered quantities of painkillers far exceeding the needs of the local population. Although Sanford's population stands at approximately 53,000, CVS pharmacies supplied amounts adequate for around 400,000 individuals. For example, one Sanford CVS location ordered 1.8 million oxycodone tablets in 2010—averaging about 137,994 per month—dramatically surpassing Florida’s average monthly order of 5,364. DEA investigators observed frequent prescriptions for oxycodone and hydrocodone at this site, with customers employing street terminology for specific drug brands, suggesting misuse and diversion. In response, CVS stated in 2012 its commitment to collaborate with the DEA and implement rigorous measures to ensure responsible dispensing of pain medications in Florida.

Controversy Over Homeopathic Product Sales

On April 1, 2011, CVS was awarded the satirical Pigasus Award by the James Randi Educational Foundation for marketing homeopathic remedies alongside scientifically validated pharmaceuticals.

Later, in July 2018, the Center for Inquiry (CfI) initiated a consumer fraud lawsuit against CVS concerning its sale of homeopathic items. The Stiefel Freethought Foundation provided additional financial support for this case in July 2019. Ultimately, the lawsuit was dismissed.

Security Breach Affecting Photo Services

On July 17, 2015, CVS discontinued its online photo processing offerings due to a security breach traced to a third-party vendor believed to be PNI Digital Media. CVS did not disclose whether customer photos or data were compromised during this incident. Further information was made available on September 11, 2015, and by November of that year, CVS had restored its online photo services.

Criticism Over Receipt Length

CVS has been criticized for issuing excessively long receipts to ExtraCare rewards members—sometimes extending up to several feet—owing to numerous targeted coupons printed on the front. CEO Larry Merlo acknowledged this concern and pledged to reduce receipt length by 25%. He also encouraged customers to utilize digital receipts and coupons through CVS’s mobile application while admitting that clearer instructions are needed for opting out of paper receipts. This issue has also become a popular topic of internet memes.

Incidents of Controlled Substance Losses

In 2020, CVS locations in Massachusetts experienced controlled substance losses at rates notably higher than those reported by competitors. The company previously faced federal penalties totaling $5 million in 2017 due to losses at California pharmacies and an additional $1.5 million fine in 2018 for failing to report losses at New York pharmacies.

Controversy Surrounding Abortion Pill Dispensing

In January 2023, CVS announced intentions to provide mifepristone, an essential medication used for abortion pills, following regulatory changes by the FDA. After obtaining necessary certification, CVS began dispensing the medication in states where it is legally permitted. This decision generated considerable political debate and protests at various CVS store locations.

Pharmacists Erroneously Administer Abortion Medication

In October 2023, CVS inadvertently provided Tamika Thomas with misoprostol, a medication used for abortion, although she was receiving fertility treatments through IVF. Following the incident, Thomas suffered intense cramping and ultimately lost both embryos. The pharmacists responsible acknowledged the mistake, faced penalties, and were placed on probation for one year. CVS Pharmacy was fined the maximum amount of $10,000. The pharmacists are eligible to return to their duties upon fulfilling probation requirements.

Lawsuit by the Department of Justice

On December 18, 2024, the United States Department of Justice initiated legal action against CVS, accusing the company of dispensing thousands of prescriptions without adequate supervision, which allegedly led to wrongful fatalities. The complaint asserts that CVS pressured its pharmacists to distribute controlled medications without proper validation to boost revenue. Previously, in 2022, CVS consented to a $5 billion settlement spread over a decade to address similar opioid-related allegations brought by state, local, and tribal authorities, without admitting any fault.

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