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CVS: From pharmacy to integrated health ecosystem

Let’s look at CVS Pharmacy – a company that decided to completely reinvent itself. Initially, CVS was similar to Walgreens: a place to fill prescriptions, buy aspirin, or pick up shampoo. But CVS saw an opportunity to go beyond the basics. Instead of partnering to expand its services, CVS chose to build its own ecosystem, which takes significant investment but can pay off if done well.

Building the ecosystem: From prescriptions to health care

The transformation began when CVS acquired Caremark, a pharmacy benefits management company. Caremark’s role was to ensure customers received prescriptions on time and at the lowest possible cost. With this acquisition, CVS took its first major step toward vertical integration.

Next, CVS rebranded itself as CVS Health to reflect its broader vision. They then made a bold move, acquiring Aetna for $70 billion. Aetna brought expertise in managing hospitalizations and medical issues, further deepening CVS’s integration into the health care ecosystem.