Company History
Caremark, formerly known as Caremark Rx, was founded in 1993 in Birmingham, Alabama as MedPartners, Inc. by HealthSouth Corporation along with Richard Scrushy, former CEO of HealthSouth, and one time HealthSouth Chief Operating Officer Larry House as a physician practice management (PPM) company. After going public in 1995, MedPartners quickly became the largest PPM company through many acquisitions (see Ross-Loos Medical Group). By 1998 MedPartner's had revenues of $7 billion.
MedPartners originally acquired Northbrook, Illinois-based Caremark International which was founded as a unit of Baxter International and was spun off from Baxter in 1992 as a publicly traded company. On May 15, 1996, Caremark International announced it would be acquired by MedPartners with MedPartners ending up with Caremark's PPM division and prescription benefit management (PBM) division and disposing of Caremark's rehabilitation Business to HealthSouth. It expanded to the distribution of drugs for other conditions, including human growth hormone and multiple sclerosis.
In October 1997, PhyCor, the second largest PPM at the time, announced they would be acquiring MedPartners for $8 billion in stock and assumed debt. However the merger agreement was terminated in January 1998. The companies cited significant operational and strategic differences as the reason for the termination of the merger. MedPartners then announced that they would suffer a net loss of $841 million for the 4th quarter of 1997. Chairman, President and CEO Larry House resigned with Richard Scrushy taking over as interim Chairman, President and CEO. Scrushy announced that he would not change his role at HealthSouth as a result of him taking over at MedPartners. On March 18, 1998, Scrushy chose Edwin "Mac" Crawford to become the new President and CEO of MedPartners. Scrushy remained as Chairman until November 1998, but remained on the board. After taking over, Mac Crawford announced that MedPartners was exiting its PPM business and refocusing on its PBM business. In 2000, after it had sold all of its PPM practices, MedPartners changed its name to Caremark Rx. In 2001 Scrushy sold his remaining shares in Caremark and left its board to continue as Chairman and CEO of HealthSouth.
In 2003 it merged with AdvancePCS seen as a key move in ensuring the growth and profitability of the company. By retaining key leaders from the AdvancePCS organization, and adopting many of its key principles, Caremark Rx was able to bolster its position within the PBM industry.
In 2004, Caremark moved its headquarters from Birmingham, Alabama to Nashville, Tennessee, where the company only maintains a small executive staff. The company still has a large presence in Birmingham. Many believed the move was an effort to hide the company's HealthSouth past due to the fact the company announced the move not long after the HealthSouth scandal. There is recent speculation that the company will close its relatively small Nashville office and combine it with its operational office in Northbrook, Illinois.
Caremark currently has approximately 16,000 employees.
It is the second largest prescription management and pharmaceutical services business in the United States.
In March 2007, Caremark merged with CVS Corporation to create CVS Caremark Corporation.
Today the company is one of the nation's leading pharmacy benefit management (PBM) companies, provides comprehensive prescription benefit management services to over 2,000 health plans, including corporations, managed care organizations, insurance companies, unions and government entities. With net revenue of approximately $37 billion (including approximately $5.8 billion of retail copayments) in 2006, they are also one of the largest PBMs. Caremark operates a national retail pharmacy network with over 60,000 participating pharmacies, as well as 56 retail specialty pharmacy stores, 20 specialty mail order pharmacies and 9 mail service pharmacies located in 26 states and the District of Columbia.
Read more about this topic: Med Partners, Inc.
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