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Ryan to retire from CVS helm

BY Antoinette Alexander

WOONSOCKET, R.I. —After spending 36 years with CVS Caremark, Tom Ryan, chairman, president and CEO, will retire as CEO in May 2011, setting in motion a succession plan that likely will position Larry Merlo as Ryan’s successor.

“I felt this was the right time to move forward with our transition plan,” Ryan stated. “In my 36 years with the company, including 15 years as president, I have never felt better about our position than I do now. We have tremendous assets, an incredibly talented management team and a strategy that is resonating in the marketplace. I made my decision knowing that CVS Caremark is in an excellent position and that we have the right team in place to build on our success.”

As part of the succession plan, Merlo has been named president and COO and, according to the company, likely will succeed Ryan as CEO. Effective immediately, Merlo has taken on the additional responsibilities of human resources, legal, corporate compliance and government relations. He most recently served as EVP of the company and president of its CVS/pharmacy retail operations, overseeing a portfolio of more than 7,000 CVS/pharmacy locations with net revenues of more than $55 billion.

Merlo began his career in chain pharmacy in 1978 as an assistant manager with People’s Drug in Washington, D.C. He joined CVS as area VP of the metro Washington, D.C., area in 1990—the year CVS acquired People’s Drug. Over the years, Merlo has held various positions at CVS, including EVP stores of CVS Corp. from April 2000 to January 2007 and EVP stores of CVS Pharmacy Inc. from March 1998 to January 2007. He currently is chairman of the National Association of Chain Drug Stores.

CVS Caremark is initiating a search for Merlo’s successor as president of the CVS/pharmacy retail operations, looking both inside and outside of the company. To facilitate the transition, the company has formed an Office of the Chairman, which includes Ryan, Merlo and Per Lofberg, president of Caremark Pharmacy Services, the company’s PBM arm.

Under Ryan’s leadership, CVS has grown from a regional drug store chain with revenues of $5 billion in 1994 to a pharmacy health-care provider powerhouse with revenues nearing $100 billion. Over the years, CVS has transformed into an industry trailblazer with its innovative beauty concepts, highly successful loyalty card program and its vertically integrated pharmacy-PBM model via the 2007 acquisition of Caremark.

In a prepared statement, Ryan assured all that with Merlo’s and Lofberg’s complementary backgrounds, the company is in “excellent hands.” At least one industry observer agreed. “We view the promotion of Larry Merlo as a large positive, as he is one of the strongest and most experienced drug retailing executives in the industry,” stated Credit Suisse analyst Edward Kelly in a research note. “We attribute much of the company’s success in retail over the last few years to his store operations ability. While some have the impression that he is not a big strategic thinker, this initial conclusion is typical of most internal CEO promotions.”

Kelly acknowledged that Merlo’s PBM expertise is “somewhat limited,” but noted that it is no more so than Ryan’s expertise, and Lofberg, a 30-year veteran of the PBM industry, will continue in his current role.

Ryan’s Career at CVS

1975 Graduated from the University of Rhode Island and joined CVS as a pharmacist.
1975-1985 Held various positions and was named VP pharmacy operations in 1985.
1988 Named SVP pharmacy
1990 Named EVP stores
1994 Named president and CEO of CVS/pharmacy
1996 Named vice chairman and COO of CVS Corp.
1998 Named president and CEO of CVS Corp.
1999 Elected chairman of CVS Corp.
March 2007 Named president and CEO of CVS Caremark
Nov. 2007 Assumes additional role of chairman of CVS Caremark

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NACDS puts a new spin on Meet the Market

BY Michael Johnsen

SAN DIEGO This year the National Association of Chain Drug Stores introduced two new features to its Meet the Market format. First, NACDS hosted a Meet the Market Presentation Template webinar twice prior to Meet the Market, in which NACDS introduced a meeting template that succinctly captured all of the information retailers typically use to evaluate a new product or company.

Also new to Meet the Market were the booths of 10 service companies — trade media and professional education, merchandising consultants and marketing/media information companies — which afforded an opportunity for new and smaller suppliers to meet with these organizations.

“New companies have a need not only to meet with retailers, obviously, they have a need for their business,” noted Jim Whitman, NACDS SVP meetings and conferences. Another ongoing improvement is the productivity within each meeting, Whitman added. “We keep refining the match, the appointments,” he said.

This year, the Meet the Market format — in which smaller and new suppliers have 10-minute meetings with their category buyers — represented more than 8,000 face-to-face pre-arranged appointments.

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Retail clinic growth slowing down? Not a chance

BY Antoinette Alexander

WHAT IT MEANS AND WHY IT’S IMPORTANT The news that Target is looking to expand its retail-based clinic business this year is yet one more indicator that reports of the demise of retail clinic growth have been greatly exaggerated.

(THE NEWS: Target to expand its retail clinic presence. For the full story, click here)

As the article states, Target, which opened its first clinic in 2006, is looking to open up eight new locations this September. It already operates 28 locations in Minnesota and Maryland.

It wasn’t so long ago — April to be exact — that CVS Caremark’s MinuteClinic indicated that it could double its current number of clinics in five years.

Why the growth? Well, aside from the aging population and a shortage of primary care physicians, a major catalyst is healthcare reform, which will mean that 32 million people who currently are uninsured will have healthcare coverage. With emergency rooms already overflowing, and primary care physicians already over-extended, having a retail clinic nearby where patients can receive convenient, quality and affordable health care will only become increasingly important.

Meanwhile, RediClinic, which has 22 clinics in H-E-B stores in Houston and Austin, Texas, is cranking up its marketing efforts and has tapped former Duane Reade executive Jeff Thompson as VP marketing. Thompson will be responsible for RediClinic’s consumer and partner marketing activities, including developing and implementing strategic customer acquisition/retention programs, new product delivery and brand strategy.

Thompson most recently served as VP marketing for Duane Reade.

Clearly, there continues to be significant growth opportunities for clinics — both in terms of the number of clinic locations and the scope of services offered within the clinics. As mentioned earlier, there are 32 million reasons why the growth will be quite dramatic.

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