CVS adding four stores in state

Locations planned for Sherwood, Northwest Arkansas

Arkansas Democrat-Gazette/MELISSA SUE GERRITS - 03/26/2014 - BUSINESS STORY Construction on a CVS begins across from a Walgreens at the intersection of Kiehl and 107 in Sherwood March 26, 2014.
Arkansas Democrat-Gazette/MELISSA SUE GERRITS - 03/26/2014 - BUSINESS STORY Construction on a CVS begins across from a Walgreens at the intersection of Kiehl and 107 in Sherwood March 26, 2014.

New England-based pharmacy retailer CVS Caremark Corp. is adding four stores in key Arkansas locations - three of them in Wal-Mart’s backyard of Northwest Arkansas.

CVS opened a store in Texarkana, Ark., in 2012 and is planning new locations in Sherwood, Van Buren, Fayetteville and Bella Vista “in the September-October time frame,” said Mike DeAngelis,director of public relations for retail pharmacy, store operations, real estate and store locations for CVS.

And there could be more to come.

“We have others in the development pipeline. These are just the ones we’re in a position to comment on, the ones that are opening within this calendar year,” DeAngelis said.

Sites are chosen, he said, for their visibility and accessibility for customers. The Sherwood and Fayetteville sites are across the street from Walgreens stores. The Fayetteville store is going up at the longtime site of a Days Inn hotel now being razed.

Wal-Mart Stores Inc. also operates pharmacies in its Northwest Arkansas Supercenters and Neighborhood Markets and in its one area Express store on the University of Arkansas campus. A request for comment from Wal-Mart was not answered.

“Naturally, we’re going to have healthy competition in any market that we enter,” DeAngelis said. CVS Caremark has become known recently as the pharmacy retailer that is ditching tobacco products, citing its role as a health-care provider and promoter of healthy lifestyles for its customers.

CVS is in about 45 states, the District of Columbia and Puerto Rico and has hundreds of locations in Texas, including one in Texarkana, Texas. Crossing over into Texarkana, Ark., “was a natural extension of our continued growth in that part of the country, and now we’re finding out about other opportunities in the state,” DeAngelis said.

Stores are typically standalone structures of about 12,900 square feet with a drive-thru window for pharmacy transactions. The company seeks locations meant to serve a trade area of at least18,000 customers. CVS also has acquired buildings that formerly belonged to existing independent and small-chain businesses.

Mark Riley, executive vice president and chief executive officer of the Arkansas Pharmacists Association, characterized CVS as a “strong competitor” and “strong national chain.” He said CVS tends to “mirror” Walgreens locations, which means increased competition yet more choices for consumers.

“Anytime you inject a new typically large pharmacy into the network it affects everybody who’s already there,” Riley said. “They’re no more prescriptions filled and services rendered in that area, it’s just that it gets spread out among the same population.”

Riley and the association are more concerned with what they perceive as an unfair advantage that CVS Caremark has over its existing competition. In the past, the company has been accused of using confidential patient information from Caremark, which manages prescription benefits for health plans, to steer consumers to CVS pharmacies. A challenge of the practice survived Federal Trade Commission scrutiny.”

“We believe it’s a conflict of interest for a company to be a pharmacy-benefit management company and yet, have pharmacies in the network themselves,” he said. “We have real concerns about all the pharmacies being treated equally.”

CVS’s DeAngelis said: “CVS Caremark maintains a firewall between our pharmacy benefit management business and our retail operations to prevent the dissemination of certain competitively sensitive information.”

Last week, CVS Caremark announced it won renewal of its Federal Employee Program contract, meaning it will continue to provide retail pharmacy-benefit management services, mail pharmacy, specialty pharmacy services and clinical programs through 2017.

According to a research note co-authored by Lisa Gill at J.P. Morgan, “This contract represented CVS Caremark’s largest piece of business up for renewal for 2015.”

The Federal Employee Program covers 5 million people, “and we estimate it represented nearly $8 billion in annual drug” expenditures, Gill said.

Business, Pages 23 on 04/01/2014

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