WHAT IT MEANS AND WHY IT'S IMPORTANT — A new chapter officially is under way for CVS Caremark, and it comes as little surprise that the Larry Merlo era has begun with a reminder of the core principles that put him in the captain's seat to begin with — flawless execution, cross-functional thinking and management, and enhancing value.
(THE NEWS: Merlo puts stamp on his leadership in fourth-quarter earnings call. For the full story, click here)
According to Merlo, those are the three things that will define the company's success in the years ahead.
Since beginning his career in chain pharmacy in 1978 with People's Drug, which CVS acquired in 1990, Merlo has become an operations guru who wrote the book on successfully integrating acquisitions. Anyone who knows CVS' history is aware that the chain hasn't always been the healthcare mammoth it is today. Over the years it has largely grown through acquisitions. The list includes 2,000 stores from Revco, 240 stores from Arbor Drugs, some 1,260 Eckerd stores, 700 stand-alone Sav-on and Osco drug stores from Albertsons and, more recently, Longs Drug Stores' 521 retail locations in California, Hawaii, Nevada and Arizona, as well as its pharmacy benefit management services.
That's not to mention the acquisitions of retail clinic operator MinuteClinic and pharmacy benefit manager Caremark.
Today, its network of some 7,100 retail locations looks like one cohesive unit; clearly, a significant portion of that success can be attributed to the talents of Merlo.
Much has been made of the company's performance on the PBM side, but that focus has largely centered on the short-term loss of one or two big clients and has overlooked its major deal with Universal American, which will vastly expand its presence in Part D at a time when the first of the boomers turns 65 years old. In fact, the deal will more than double the size of CVS Caremark's Medicare Part D program.
As of Jan. 1, approximately 7,000 baby boomers will turn 65 years old each day, according to AARP.