CVS Caremark scores PBM contract

WOONSOCKET, R.I. CVS Caremark has secured a new $1 billion, two-year contract with the Teacher Retirement System of Texas, according to published reports.

The contract will begin in September 2010, and is valued at $480 million in 2011 and $518 million in 2012, according to a Wall Street Journal report. The deal reportedly allows for as many as four optional one-year renewals.

A CVS Caremark spokesperson wasn't immediately available for comment.

Commenting on the deal, Wells Fargo Securities LLC analyst Matt Perry stated in a research note that it was "good news" for CVS Caremark.

"The contract award is a step in the right direction for CVS, but the bigger risk/opportunity is the PBM selling season for 2011, which gets into full swing in mid-2010," stated Perry.