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Caremark unit drags down CVS net

Associated Press / May 6, 2011

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NEW YORK — CVS Caremark Corp. said yesterday that its first-quarter net income fell nearly 8 percent as its pharmacy benefits management business continued to report lower profits.

CVS said it expects Caremark’s results to start to improve in 2012, when it will reap the benefits of a wave of profitable and low-cost generic drugs. Chief executive Larry Merlo defended CVS Caremark’s business model, which has faced criticism from some shareholders and scrutiny from competitors and regulators. “Despite conjecture in the marketplace, there are no plans to split up the company,’’ he said.

The Woonsocket, R.I., company said its profit fell to $713 million, or 52 cents per share, in the quarter ended in March, from $771 million, or 55 cents per share. Its revenue grew 9 percent to $25.88 billion from $23.76 billion.