Call for consumers to legally and safely import prescription drugs

In testimony before the Department of Health and Human Services Drug Importation Task Force, CVS/pharmacy Chairman, President and CEO Tom Ryan called on Congress and the Administration to quickly establish a means for consumers to legally and safely import prescription drugs. To do otherwise, he said, would be to ignore the millions of Americans who are forced to go outside the existing prescription drug system in the U.S., which is intended to ensure drug safety, because they cannot afford to buy drugs within the system.

"While many in our industry believe that importation is a fundamentally flawed concept and oppose it without exception, I have come to a slightly different view," Ryan said. "Simply put, there are too many patients our pharmacists never see because they cannot afford the drugs we dispense, and others who are unable to pay for a full regimen of medications because it soaks up so much of their disposable income."

For those reasons, Ryan said he supports a safe, legal system of importation that would include the bulk importation of medicines from Canada as well as other nations where safety and quality measures are similar to those in the United States and dispensed by licensed U.S. pharmacies.

Ryan added that if such a system were put in place, CVS/pharmacy would commit to playing an active role in providing access to imported drugs to consumers who need them.

Despite his support for importation, Ryan said he believes it should be viewed only as a temporary solution. In order to truly address the problem of skyrocketing drug costs for Americans, the existing global pricing model, under which identical drugs to those sold in the U.S. often cost far less in other countries due to government price controls. "The existing underlying global pricing model simply cannot be sustained," said Ryan.

The CVS/pharmacy CEO said that the federal government and pharmaceutical companies must move the industry to a global pricing system that is fair across all countries and that is based on what the market is able to bear and the value delivered by the products. "The United States cannot bear the cost of R&D for the world," said Ryan. "International trade negotiations are one place where the U.S. can begin to lead the way to establishing a more appropriate, market-based pricing system with our trading partners. In the longer-term, the answer must be fair and equitable trade practices and open access. We cannot allow millions of our fellow citizens to go without life sustaining medications due to arbitrary international trade practices. We don't do it for sugar, rice or corn; we shouldn't do it for life saving medications."

"It is a complicated problem with neither simple explanations nor simple solutions," Ryan continued. "But this much is clear: No industry can permanently sustain a pricing system in which the cost of a product varies so radically from one country to the next, and pharmaceuticals are no exception."

With over 40 years of dynamic growth in the retail pharmacy industry, CVS is committed to being the easiest pharmacy retailer for customers to use. With 4,187 stores in 32 states and the District of Columbia, CVS has created innovative approaches to serve the healthcare needs of all its customers through its online pharmacy, CVS.com and its pharmacy benefit management and specialty pharmacy subsidiary, PharmaCare Management Services.

On April 5, 2004, CVS entered into a definitive agreement under which it will acquire 1,260 Eckerd drug stores, located mainly in the southern United States, in addition to Eckerd Health Services, which includes Eckerd's mail order and pharmacy benefit management businesses. The transaction is subject to review under the Hart-Scott Rodino Act as well as other customary closing conditions, and is expected to close in June of 2004. General information about CVS is available through the Investor Relations portion of the Company's website, at http://investor.cvs.com.