|CVS And Merck-Medco Form Strategic Alliance For Internet And Specialty Pharmacy Services|
|Franklin Lakes, N.J. and Woonsocket, R.I.--(BW HealthWire)--Oct. 6, 1999--
CVS.com to be exclusive provider of OTC and general health products for Merck-Medco's 51 million plan members on merck-medco.com
Merck-Medco plan members will be able to access Merck-Medco mail service pharmacies through CVS.com
CVS/ProCare will be the exclusive mail order specialty pharmacy provider for Merck-Medco members who require treatment for complex and expensive drug therapies
CVS and Merck-Medco sign ''pay for performance'' retail pharmacy agreement
CVS Corporation (NYSE:CVS - news) and Merck-Medco Managed Care, L.L.C., today announced that they have formed a long-term strategic alliance to collaborate on enhanced Internet, retail and specialty pharmacy services for Merck-Medco's 51 million health plan members.
The agreement will expand the product offerings on merck-medco.com by enabling Merck-Medco plan members to purchase over-the-counter medicines and general health products on the site. CVS.com will be the exclusive provider of these products for Merck-Medco's Internet customers.
The agreement also formalizes an arrangement that will make CVS.com the first and only online retail pharmacy to accept prescription orders from Merck-Medco members over the Internet for delivery either by Merck-Medco's nationwide network of 13 mail service pharmacies or for pick-up at CVS stores. Merck-Medco's health plan members will be able to order either 30 or 90-day prescriptions through CVS.com's web site for dispensing by Merck-Medco's mail service pharmacies.
The agreement also makes CVS's specialty pharmacy company, ProCare, the exclusive provider of specialty pharmacy mail order services for Merck-Medco plan members. ProCare is a subsidiary of CVS that focuses on supporting individuals requiring complex and expensive drug therapies. CVS and Merck-Medco will jointly market ProCare's specialty pharmacy products and services to Merck-Medco's clients. As part of the agreement, Merck-Medco will acquire up to a 10% equity interest in ProCare.
The alliance includes a ''pay for performance'' retail pharmacy arrangement, which allows for better alignment on cost containment initiatives such as generic substitution and other pharmacy management programs. This agreement will more closely align the companies in improving the quality of pharmacy services and controlling pharmacy costs.
''This agreement unites two important leaders of America's health care industry - Merck-Medco and CVS - in a strategic alliance that demonstrates our ongoing commitment to delivering the highest quality, most affordable care and service to our health plan clients and their members,'' said Per G.H. Lofberg, President, Merck-Medco. ''Now, in addition to ordering prescription refills and renewals and accessing the extensive health and benefit plan information on our site, merck-medco.com, plan members will be able to enjoy one-stop shopping for all their pharmacy needs. We look forward to further developing this important partnership with CVS.''
''This agreement between the nation's number one pharmacy benefit management company and the nation's number one pharmacy chain creates a unique partnership within the national healthcare arena,'' said Tom Ryan, Chairman and Chief Executive Officer of CVS. ''For CVS, this agreement is a major step forward for our e-commerce efforts and provides exclusive OTC access to all of Merck-Medco's more than 51 million members nationwide, many of whom are west of the Mississippi, a region where CVS currently does not have retail stores. For both parties, this is a broad and deep strategic alliance that enhances our national reach and provides a more complete healthcare solution for our customers. This relationship with Merck-Medco will also pave the way for other collaborative efforts in the future.''
Merck-Medco Managed Care, L.L.C., a subsidiary of Merck & Co., Inc. is the nation's leading provider of prescription drug care, serving 51 million Americans. Launched in October 1998, merck-medco.com gives Merck-Medco plan members an additional way of providing for their prescription and overall health care needs and is the world's largest Internet pharmacy. Additional information about Merck-Medco is available on the World Wide Web at www.merck-medco.com.
CVS is the nation's largest provider of prescriptions. The company is the No. 1 drugstore chain in the U.S., with approximately 4,100 stores in the Northeast, Mid-Atlantic, Southeast and Midwest regions. CVS.com was first launched as Soma.com in January 1999. After the purchase of Soma.com by CVS, the site was re-launched as CVS.com in August 1999. CVS.com is the only Internet pharmacy to combine an established online pharmacy with a traditional brick-and-mortar pharmacy. General information about CVS is available at CVS' web site on the World Wide Web at www.cvs.com.
Note: Merck-Medco will provide prescription drug benefit services to more than 65 million members by June 2000 when it begins serving the United Healthcare Group and other new clients.
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