How CVS Health became No. 1 healthcare company

How CVS Health became the number 1 healthcare company in the world with its acquisition strategies.

CVS Health Corporation is an American healthcare company. The company was founded in 1963 in Lowell, Massachusetts U.S., by two brothers: Stanley Goldstein & Sydney Goldstein and their partner Ralph Hoagland under the name: Consumer Value Stores.

By 2020, CVS Health was situated at 9962 locations in the US with the aim of providing healthcare services to customers.

As of today, the company’s headquarters is situated in Woonsocket, Rhode Island, United States.

CVS boasts about 295000 employees and a revenue of 292.11 billion dollars (for 2021).

The company also has different subsidiaries under its control.

These subsidiary companies are;

1.CVS pharmacy

2. Minute Clinic

3. CVS Caremark

4. Longs Drugs

5. Navarro Discount Pharmacies

6. Omnicare

7. Aetna

8. CVS International

CVS’s first store was only selling health and beauty products, and in 1964, the company grew rapidly from having just one store in Lowell to having 17 stores that sold primarily beauty products. The original logo of the store was developed and displayed on the store’s exterior, for the first time.

In the year 1967, the company opened its inaugural store with pharmacy departments in Warwick and Cumberland, Rhode Island.

CVS Health was sold to Melville corporation in 1969. Just a year after the company was sold to Melville corporation, the company was operating in 100 stores in New England and the Northeast.

By the year 1972, CVS purchased 84 Clinton drugs and discount stores, thus introducing the company to the Midwest, with its stores located in Indiana.

In 1974, the company announced a benchmark achievement of 100 million dollars in annual sales.

Later on, CVS Health acquired 36 New-Jersey based Mack drug stores in 1977.

In 1978, CVS Pharmacy differentiates itself from competitors by opening small health and beauty aids stores in enclosed shopping malls.

By 1983, CVS launched the Hemophilia patient home health care, to specifically take care of patients suffering from Hemophilia.

The next year, Senior Vice President of Marketing, Harvey Rosenthal was named the President and CEO of CVS, succeeding Stanley Goldstein, who just became the Executive Vice President of Melville corporation.

The company announced they have reached annual sales of 1 billion dollars in 1985.

In the year 1988, CVS bought Heartland Drug, a small pharmaceutical company in the Boston area and gave it to the company stores in the Boston metro including Watertown square and Harvard square.

That same year, CVS also celebrated its 25th anniversary, as it finished that year with sales of approximately 1.6 billion dollars and nearly 750 stores.

In 1990, Melville purchased 500 Peoples Drugs Stores for a sum of 300 million dollars and merged them with CVS. By doing this, they established the company in the new Mid-Atlantic markets, including Washington D.C., Pennsylvania, Maryland, and Virginia.

Baxter International then purchased Prescription Health Service in 1991.

In 1992 Caremark was created as a spin-off from Baxter. Caremark defined its core operational unit to be a pharmaceutical service and establishes a national pharmacy and therapeutics committee. The Caremark formulary got developed, and clinical intervention programs got introduced. In the year 1994, just two years after Caremark’s formulary was developed, CVS launched Pharmacare, a Pharmacy Benefit Management Company, that would provide a wide range of services to employers and insurers.

Caremark launched CarePatterns, a disease management program in the year 1995.

In the year 1996, due to the restructuring of Melville corporation, CVS became an independent company, trading on the New York Stock Exchange under the CVS ticker. Stanley Goldstein became the first chairman of CVS. Caremark also enters the multiple sclerosis marketplace. CVS acquired over 2500 Revco Drug Stores for a sum of 2.8 billion dollars, making the company gain serious ground in additional Midwestern, Southeastern and Eastern states.

Caremark continues to grow as it merges the prescription management business with the biotech business. CVS got its first stores in Michigan when it acquired 207 stores from Arbor Drugs for 1.48 billion dollars. This brought the store total to 4100 in 24 states.

In 1999, CVS became the first fully integrated online and brick-and-mortar pharmacy when it acquired Soma.com, the first online pharmacy. The company was acquired for a sum of 30 million dollars and was changed to CVS.com. CVS also announced plans to enter Florida with stores planned for the Tampa market. CVS bought out Stadtlander pharmacy in the year 2000, making CVS ProCare the largest pharmacy in the United States at the time for the sum of 124 million dollars.

In 2001 CVS launched a program called Extra Card Loyalty program, where enrolled customers got rewards and discounts. This turned out to be a huge success as 30 million people enrolled within a year.

CVS continued to grow as it announced its plans to go into Texas with stores targeted at high-growth population markets like Dallas and Houston in 2002. The company also announced plans for its first locations in Phoenix and Las Vegas.

CVS also purchased 1260 Eckerd drug stores and Eckerd Health Services for $4.5 billion and its mail-order pharmacy business at the cost of 2.15 billion dollars, all from J.C. Penny in 2004.

All CVS’s ProCare stores got rebranded to PharmaCare.

In 2005, CVS partnered with Minute Clinic, announcing three clinics to open in CVS Pharmacy stores. The following year, CVS acquires 700 independent Sav-On and Osco drug stores from Albertsons, expanding its presence in Southern California and key Midwest markets. CVS merged with Caremark in the year 2007 to become CVS Caremark, the nation’s premier integrated pharmacy service provider.

CVS purchased 541 stores from Longs Drugs in California, Nevada, Arizona and Hawaii giving the company immediate market leadership in Northern and Central California for a sum of about 2.6 Billion dollars in 2008.

In 2011, CVS Caremark had a change in leadership as Larry Merlo succeeded Thomas Ryan as the CEO of the company. A year into Merlo’s administration, CVS Caremark announced its revenue to be over 100 billion dollars in 2011.

CVS Caremark purchased Coram, the specialty infusion service and enteral nutrition business unit under Apria Healthcare Groups Inc., in the year 2014 for 2.1 billion dollars. In February of that same year, the company made an announcement that it would quit selling cigarettes and tobacco products in all of its stores and pharmacies.

In September 2014, CVS removed all cigarettes and tobacco products from their stores and pharmacies and even launched a national smoking cessation program. The company also announced the conversion of its corporate from CVS Caremark to CVS Health. Later that year, the company acquired Navarro, the largest Hispanic-owned drugstore chain in the U.S. The stores boasted an annual sale of about 340 million dollars before being purchased by CVS Health.

In 2015, CVS Health completed the acquisition of Omnicare, a company that provides pharmaceutical services to nursing care facilities at a cost of 12.7 billion dollars.

The company also purchased Targets corporation’s 1600+ pharmacies and retail medical clinics inside target stores for 1.9 billion dollars, enabling the company to start operating in a store within-store format.

In December 2017, CVS announced that an agreement was reached to buy Aetna for $69 million which constituted about 207 dollars per share broken down to 145 dollars in cash and the rest in stock. Larry Merlo told USA today that the company planned to renovate its stores with the aim of turning the company’s focus to more on health and less on retail, following its partnership with Aetna. The new goal was to provide medical services along with prescription drugs along with other products. On the 28th of November 2018, CVS completed its acquisition of Aetna.

The following month, a U.S. District, Judge Richard J. Leon informed CVS Health and Aetna to keep their management separate until the 69 billion dollars was weighed. Both companies were given till December 14th 2018 to explain why no consolidation on both companies should be held off. In September 2019, Judge Leon gave the final approval to the merger. As a condition of this approval, Aetna sold its Medicare prescription insurance plans to WellCare Health Plans.

On December 2nd, 2021, CVS Health and Microsoft partnered to improve personalised care and digital health. With the current performance of CVS Health, it is obvious that they have built a gigantic health empire through acquisitions.

For the year ended, 2021, CVS made a revenue of $292.1 billion, a total asset of $232.9 billion and a net income of $7.91 billion, making them the number one healthcare provider in the world by revenue and total asset at the time of this writing.