For most people, the CVS name is synonymous with our 6,150 retail pharmacies located from coast to coast. Through our PharmaCare subsidiary, we also operate strong mail order, specialty pharmacy, and pharmacy benefits management businesses. In fact, PharmaCare generated $3.7 billion in revenue in 2006, a 25 percent increase over the previous year.

PharmaCare's mail order business continued to thrive in 2006, with prescription volumes up nearly 10 percent. Its specialty pharmacy business enjoyed even more robust growth. With a network of 52 retail specialty pharmacies and specialty mail order facilities, PharmaCare serves patients with complex medical needs. Specialty patients comprise 1 percent of the population, yet they account for 33 percent of the total amount spent on healthcare. Through its focus on important treatments for oncology, multiple sclerosis, rheumatoid arthritis, and organ transplant recipients, PharmaCare helps clients better manage the high cost of specialty care.

Superior service, a focus on reducing costs, and the strength of the CVS/pharmacy retail network make PharmaCare a popular PBM among employers of all sizes, health plans, and other payors. Among them, PharmaCare administers pharmacy benefits for more than 144,000 employees and retirees of DaimlerChrysler's Chrysler Group along with their dependents. PharmaCare gained an additional 460,000 lives through its Medicare Part D partnership with Universal American Financial Corp., a new driver of revenue growth.

PharmaCare helps payors and patients alike save money by, among other things, moving them to generic formulations of popular drugs as soon as they become available. As part of CVS, the industry's largest purchaser of generic drugs, Pharma-Care can leverage its buying power to keep costs to a minimum.