CVS raises forecast due to rival pharmacies’ rift

WOONSOCKET, R.I. – CVS Caremark Corp. expects its full-year profit to be slightly better than expected as it wins over former patrons of Walgreen Co. who fill prescriptions with pharmacy benefits manager Express Scripts Inc.

CVS, which operates the CVS drugstore chain and the CVS Caremark pharmacy benefits management business, also posted a fourth-quarter profit in line with analysts’ expectations, helped by better-than-expected revenue.

CVS is among the retailers benefitting as patients who still fill their prescriptions in the Express Scripts network go elsewhere after Walgreen stopped filling such prescriptions at the beginning of the year.

Pharmacy benefit managers, or PBMs, such as Express Scripts and CVS Caremark administer drug benefits for employers and health plans and they also run mail-order pharmacies. CVS can add the ability to pick up prescriptions at its namesake drugstores.

CVS expects to post 2012 adjusted earnings of $3.18 to $3.28 per share, raising the low and high end of its December forecast by 3 cents.

The higher forecast only reflects the expected benefit the company foresees in the current first quarter. In December, CVS CFO Dave Denton said the rift could add 8 cents to 11 cents per share to the company’s 2012 profit.

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