WOONSOCKET, R.I. — CVS Caremark released on Thursday a report showing that the company's Michigan operations directly and indirectly contributed more than $520 million to the state's gross domestic product in 2011 and, over the next 10 years, is projected to grow into the billions.
According to the findings of the study, which Anderson Economic Group conducted for CVS Caremark, the company's Michigan operations directly and indirectly contributed more than $520 million to the state's GDP in 2011 and supported more than 8,000 jobs, which resulted in $283 million in labor income. The company's operations also resulted in $106 million in state and local taxes.
Over the next 10 years, the study found that CVS Caremark's contribution to Michigan's GDP is projected to be approximately $7 billion, assuming its growth matches the average annual growth for the national economy, which is projected by the Congressional Budget Office to be 4.7%. However, if CVS Caremark's growth over the next 10 years matches its historical growth, its contribution over the next 10 years would increase to approximately $15 billion, the Anderson study projected.
"We are committed to Michigan and are proud of our positive impact on the state's economy," stated CVS Caremark president and CEO Larry Merlo. "The results of this study are further evidence that as we expand our operations, our present and future colleagues in Michigan will be instrumental in our quest to be a pharmacy innovation company that is reinventing pharmacy for better health."
CVS Caremark maintains an extensive operational footprint in Michigan. These operations include a distribution center totaling 640,000 sq. ft., 245 CVS/pharmacy stores and 10 MinuteClinics. The state also is home to a Specialty Mail Order Pharmacy. These operations directly employ nearly 5,300 people.
The industries most impacted by CVS Caremark expenditures are service industries, with finance, real estate and professional and business services accounting for nearly half of the value added and the earnings that are caused indirectly by CVS Caremark expenditures.
The economic scope of CVS Caremark was measured using four metrics: employment, labor income, taxes and value added. For each of these measures, the direct, indirect and induced impacts are calculated to quantify CVS Caremark's total contribution.
In related news, recent research conducted by CVS Caremark also evaluated the economic impact the issue of medication adherence has on all 50 states, including Michigan. The state received bronze status, ranking relatively high for use of generic medications, in the middle for prescriptions delivered by mail order and relatively low for first-fill persistency rate, with 39% of patients who have chronic disease in the state not refilling their prescription after the first fill.
To read the complete report, "Economic Benefits Study: Contributions of CVS Caremark to Michigan's Economy," and to view Michigan's medication adherence statistics, click here.