CVS Caremark
The pharmacy benefit management subsidiary of CVS Health.
Last updated October 14, 2026
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Overview
CVS Caremark is the pharmacy benefit management (PBM) business of CVS Health Corporation. It administers prescription-drug benefits for employers, health insurers, government employee programs and other plan sponsors, rather than operating primarily as a consumer-facing retail pharmacy brand. Its activities include prescription-claims processing, pharmacy-network administration, formulary and utilization management, mail-order dispensing, specialty-pharmacy services, infusion services, and the design and administration of pharmacy benefit plans. The business traces its corporate lineage to MedPartners, which was established in Birmingham, Alabama, in 1993 as a physician-practice-management company. MedPartners expanded rapidly through acquisitions before purchasing Caremark in 1996. Caremark had originated as a specialized home-care and chronic-illness services company and had developed a substantial mail-order pharmacy operation. After a proposed 1997 combination with PhyCor collapsed, MedPartners reassessed its portfolio and began exiting physician-practice management. The company sold or separated its clinical businesses and concentrated on the Caremark pharmacy-benefits operation. In 2000, it adopted the name Caremark Rx, reflecting the pharmacy business that had become its principal activity. Caremark Rx expanded its PBM scale through the 2003 merger with AdvancePCS, another major pharmacy-benefits administrator. The combined company moved its headquarters from Birmingham to Nashville, Tennessee. In March 2007, Caremark Rx merged with CVS Corporation, creating CVS Caremark Corporation and combining a large PBM with CVS's retail-pharmacy and consumer-health operations. The combination gave the enlarged company a broad pharmacy platform spanning benefit administration, mail service, specialty pharmacy and a national retail network. In 2014, the parent company changed its corporate name from CVS Caremark to CVS Health. The Caremark name continued as the identity of the PBM subsidiary, while CVS Pharmacy remained the retail-pharmacy business. The 2014 corporate rebranding also coincided with CVS Health's decision to remove tobacco products from its stores, a move positioned as part of a broader health-oriented strategy; the retail signs themselves retained the CVS Pharmacy identity. CVS Caremark's customers are principally institutional plan sponsors and health-plan members. Its commercial role is to negotiate and administer prescription benefits, establish or support formularies, manage pharmacy access and claims, and provide dispensing channels for maintenance and complex medicines. Specialty-pharmacy and infusion capabilities are particularly relevant to high-cost or clinically complex therapies. The company also operates mail-service fulfillment for eligible prescriptions and uses pharmacy-network contracting to connect members with participating pharmacies. The PBM market is highly concentrated. CVS Caremark is generally described as one of the three largest United States PBMs, alongside Express Scripts and Optum Rx. Reference material states that the three major PBMs processed approximately 80 percent of equivalent prescription claims in 2024 and that CVS Caremark processed about 1.9 billion 30-day-equivalent claims that year. These figures describe market scale rather than standalone publicly reported revenue for the subsidiary. The business has also faced commercial and policy scrutiny common to the PBM sector, especially over pricing transparency, formulary decisions, rebates, pharmacy reimbursement and the relationship between PBMs, insurers and affiliated pharmacies. In 2023, CVS Caremark introduced its TrueCost pricing model, presenting it as a way for clients to see prescription pricing based on the net cost of medicines with greater visibility into administrative fees and related cost structures. In 2019, Walmart announced that it would stop using CVS Caremark as its PBM. In 2025, CalPERS announced that C…
History
CVS Caremark's history combines the development of a physician-practice-management company with the growth of a specialized pharmacy-benefits business. The corporate predecessor MedPartners was founded in 1993 in Birmingham, Alabama. Led initially by Larry House, the company went public in February 1995 and pursued an acquisition-led expansion strategy in physician practice management. It acquired or assembled medical groups and practice-management operations in several regions, becoming one of the largest companies in the sector and entering the Fortune 500 by 1997. The Caremark side of the lineage began earlier. Caremark International was founded in 1979 in Newport Beach, California, to provide specialized medical products and services to chronically ill patients in their homes. It also developed a large mail-order pharmacy-benefit operation. Baxter International acquired the company in 1987 and spun it off in 1992. The businesses included home intravenous-drug services, mail-order pharmacy, physician-management activities and physical-therapy operations. Caremark sold its home intravenous business to Coram in 1995 and its physical-therapy and sports-medicine business to HealthSouth later that year. MedPartners announced a $2.5 billion acquisition of Caremark in May 1996. MedPartners announced a proposed $6.8 billion acquisition by PhyCor in October 1997. The transaction was abandoned in January 1998 after due-diligence concerns involving MedPartners' western physician-practice operations. House left the chair and CEO positions, Richard Scrushy served temporarily as chairman and CEO, and Edwin Mac Crawford was subsequently selected as CEO. The failed transaction prompted a strategic review. MedPartners concluded that physician-practice management was no longer its preferred direction and began selling the clinics and related businesses. TeamHealth was sold in 1999 to Madison Dearborn Partners and its management team, while the company concentrated on the Caremark PBM operation. After divesting the clinical businesses, MedPartners changed its name to Caremark Rx in 2000. The name signaled that pharmacy-benefit management had become the company's central business. In 2003, Caremark merged with AdvancePCS, increasing its scale in prescription-benefit administration. The combined company moved its headquarters from Birmingham to Nashville, Tennessee, while a mail-order operation remained in Birmingham for a period. In March 2007, Caremark Rx merged with CVS Corporation. The resulting CVS Caremark organization joined PBM capabilities with CVS's retail pharmacies and broader health-services platform. The Nashville office was closed following the merger. The arrangement enabled the parent company to offer plan sponsors an integrated set of pharmacy-network, mail-service, specialty and benefit-administration capabilities, while maintaining separate operating identities for CVS Pharmacy and the Caremark PBM. In September 2014, the parent company adopted the name CVS Health. CVS Caremark consequently became the pharmacy benefit management subsidiary rather than the name of the overall corporation. The rebranding occurred alongside CVS Health's decision to remove tobacco products from more than 7,800 stores in 47 states, a move that reinforced the parent company's health-focused positioning. During the 2010s and 2020s, CVS Caremark continued to operate in a highly concentrated and politically scrutinized PBM market. Its responsibilities include claims processing, formulary administration, network contracting, mail-order fulfillment and specialty pharmacy. Leadership changes included Alan Lotvin's appointment as president in 2020, David Joyner's tenure as president from January 2023 to October 2024, and Ed DeVaney's appointment as president in 2025 after an interim period. In 2023, the company introduced TrueCost, a pricing model intended to make net prescription costs and administrative fees more visible to clients. In 2025, CalPERS selected CVS Caremark to serve approximately 587,000 members.
- 2025
CalPERS selects CVS Caremark
[1]CalPERS announces CVS Caremark as its PBM for approximately 587,000 members.
- 2023
TrueCost pricing model announced
[1]CVS Caremark introduces a model designed to expose net medication costs and administrative fee structures more clearly to clients.
- 2014
Parent company becomes CVS Health
[1]CVS Caremark becomes the PBM subsidiary of the renamed CVS Health Corporation.
- 2007
CVS Corporation and Caremark Rx merge
[1]The transaction creates CVS Caremark and combines a major PBM with CVS's retail-pharmacy platform.
- 2003
Caremark merges with AdvancePCS
[1]The merger expands Caremark's position in pharmacy benefit administration and is followed by a headquarters move to Nashville.
- 2000
MedPartners becomes Caremark Rx
[1]The company changes its name after making pharmacy-benefit management its core business.
- 1998
Strategic review follows failed PhyCor merger
[1]After the proposed PhyCor combination is abandoned, MedPartners reviews its operations and begins exiting physician-practice management.
- 1996
MedPartners acquires Caremark
[1]MedPartners announces and completes the acquisition of Caremark, bringing the pharmacy-benefit business into its corporate portfolio.
- 1993
MedPartners is established
[1]MedPartners is founded in Birmingham, Alabama, as a physician-practice-management company.
- 1979
Caremark International is founded
[1]Caremark International begins as a provider of specialized home medical services and products and later develops a significant mail-order pharmacy operation.
Products and positioning
A large United States pharmacy benefit manager focused on administering prescription benefits, coordinating pharmacy access and specialty services, and helping plan sponsors manage drug costs and member care.
PBM administration
Pharmacy benefit management
CVS Caremark administers prescription benefits for employers, insurers and public-sector plan sponsors. Services can include plan design, eligibility and claims administration, pharmacy-network contracting, member support, utilization controls and coordination among plan sponsors, pharmacies and drug manufacturers.
Mail-order pharmacy
Caremark Mail Service
The mail-service channel dispenses eligible maintenance prescriptions directly to members, supporting longer-day supplies and home delivery. It is an important part of the PBM's fulfillment model and is distinct from CVS's consumer retail pharmacy stores.
Specialty pharmacy
Specialty Pharmacy
Specialty-pharmacy services support medicines that may require clinical oversight, special handling, adherence assistance or coordination with prescribers. The offering is aimed at complex and frequently high-cost therapies and may include patient support and utilization-management functions.
Clinical and benefit management
Formulary Management
Formulary management helps plan sponsors determine which medicines receive preferred coverage and under what conditions. It can involve clinical review, tier design, prior authorization, step therapy and other utilization-management tools intended to balance access, outcomes and plan cost.
Pricing model · 2023
TrueCost
Announced in 2023, TrueCost is a CVS Caremark pricing model positioned around greater visibility into the net cost of prescription medicines, administrative fees and the structure of client charges.
Controversies
2019
Harris County files insulin price-fixing lawsuit
Harris County sued insulin manufacturers Eli Lilly, Novo Nordisk and Sanofi, along with pharmaceutical benefit managers Aetna Rx, CVS Caremark, Express Scripts and OptumRx, alleging they colluded to drive up insulin prices. The county seeks to recover more than $27 million it says it has paid to the companies.
Marketing campaigns
- 2014CVS Health tobacco-free retail strategy
United States
At the time of the CVS Health corporate rebranding, the parent company removed tobacco products from more than 7,800 stores in 47 states. Although the action primarily concerned CVS Pharmacy, it supported the health-oriented positioning associated with the broader CVS Health family.
Outcome. CVS Health retained the CVS Pharmacy retail identity while repositioning the corporate group around health services.
Brand decisions
2025
Win the CalPERS PBM mandateOtherBackground
CalPERS sought a pharmacy benefit manager for its public-employee membership.
Action taken
CalPERS announced CVS Caremark as its PBM for approximately 587,000 members.
Aftermath
The selection expanded CVS Caremark's disclosed public-sector client base; contract financial terms are not provided in the supplied material.
2023
Introduce the TrueCost pricing modelPrice changeBackground
PBM pricing and the visibility of rebates, fees and net drug costs have become major issues for plan sponsors and policymakers.
Action taken
CVS Caremark announced TrueCost, presenting it as a model that gives clients clearer information about net medication costs and administrative fees.
Aftermath
The initiative became part of CVS Caremark's transparency and client-value positioning; detailed financial outcomes are not established in the supplied sources.
2007
Merger with CVS CorporationM&ABackground
The transaction was intended to combine CVS's retail-pharmacy presence with Caremark's prescription-benefit administration capabilities.
Action taken
Caremark Rx merged with CVS Corporation to form CVS Caremark.
Aftermath
The resulting organization operated a vertically connected pharmacy platform within the later-renamed CVS Health group.
2003
Merger with AdvancePCSM&ABackground
Caremark sought additional scale in the competitive pharmacy-benefit administration market.
Action taken
Caremark merged with AdvancePCS and continued operating as a larger PBM.
Aftermath
The combined company moved its headquarters to Nashville and expanded its pharmacy-benefit platform.
2000
Focus the company on pharmacy benefitsStrategyBackground
Following the failed PhyCor merger and a review of its physician-practice-management operations, MedPartners determined that its pharmacy-benefit business offered the clearest strategic focus.
Action taken
The company divested clinic and related physician-management businesses and adopted the Caremark Rx name.
Aftermath
Caremark Rx developed as a focused PBM and subsequently merged with AdvancePCS before joining CVS.
Recent events
Blue Cross Blue Shield of Massachusetts announces CVS Caremark partnership[4]
Reported:
Blue Cross Blue Shield of Massachusetts announced a pharmacy benefit partnership with CVS Caremark. CVS Caremark will help manage pharmacy benefit services for the insurer’s commercial and Medicare groups and individual health plans; the agreement is scheduled to commence in January 2023.
Derica Rice to depart CVS Health[5]
Reported:
CVS Health said Derica Rice, executive vice president and president of CVS Caremark, would depart the company and remain through February to help ensure a transition.
CVS Health appoints Alan Lotvin as CVS Caremark president[5]
Reported:
CVS Health said it appointed Alan Lotvin, then an executive vice president, as president of CVS Caremark. He will also oversee CVS Specialty and CVS Kidney Care.
- Unconfirmed
Harris County files insulin price-fixing lawsuit[3]
Harris County sued insulin manufacturers Eli Lilly, Novo Nordisk and Sanofi, along with pharmaceutical benefit managers Aetna Rx, CVS Caremark, Express Scripts and OptumRx, alleging they colluded to drive up insulin prices. The county seeks to recover more than $27 million it says it has paid to the companies.
Sources5 sources
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