...healthcare service retailer... "CVS is on the corner, on the phone and on the web, offering healthcare products and services to meet all of our customers' needs."

The CVS.com Pharmacy Counter offers prescription refills and advice for Internet customers. Customers who get their film developed at CVS can have their pictures uploaded to the Kodak Picture Center® at CVS.com, a popular and fast-growing service.

America's 1st Major Integrated Pharmacy and Front-End Offering

    CVS.com was the industry's first major "clicks and mortar" pharmacy to offer pharmacy and front-end products, a perfect example of how we have been putting innovative technology to work to make life more convenient for our customers. CVS.com provides 24-hour access to registered pharmacists through the Internet or via a toll-free telephone number. Visitors to CVS.com can research health-related information or shop for thousands of over-the-counter items at highly competitive prices. They can pick up their purchases at the nearest CVS/pharmacy or have them delivered to their homes.
    In only its second year of operation, the CVS.com site has been significantly enhanced and is on its way to profitability by no later than 2002. In fact, in recent Gomez rankings, CVS.com was ranked among the top pharmacy sites.
    About 70% of CVS.com's pharmacy customers choose in-store pickup of their prescriptions. In markets where we have stores, however, more than 90% choose in-store pickup, indicating the significance of a "clicks and mortar" strategy.

Our private label vitamins, herbal remedies and nutritional supplements are available not just in our stores, but online as well.

    We have entered into two important strategic partnerships, with Merck-Medco and WebMD. We now have the exclusive right to sell over-the-counter medications, such as vitamins, herbal remedies and health and beauty aids, to Merck-Medco.com customers, gaining exposure to Merck-Medco's 53 million members nationwide, many of whom are in areas west of the Mississippi where CVS does not yet have a presence. Early sales from the site are robust. WebMD became our exclusive provider of health content, providing our customers with Internet access to reliable health-related information from expert sources.
    We made the decision in 2000 to relocate CVS.com's operations to our headquarters in Rhode Island to better leverage our existing retail support infrastructure and to accelerate our path to profitability. Our vision for this fast-growing new business includes providing a vehicle for physicians to write prescriptions and send them directly to pharmacies via the Internet. We are working toward a total e-connectivity solution that will improve healthcare delivery by directly linking physicians, pharmacists and patients over the Internet. In the long term, we will roll out additional programs that will link our Internet business with our stores in order to deliver greater value to customers.